Seller's 10 Steps in the M&A Process (10 Steps to Sell Your Business)

Seller's 10 Steps in the M&A (Mergers & Acquisitions) Process - 10 steps to sell
Steps in the M&A Process
1. Pre-Process - (00:30)
Make your business more sellable - creating recurring revenue streams, reduce customer concentration, take yourself out of the center of the business, and start on high-hope initiatives
2. Assemble Your M&A Team - (02:18)
Attorneys
Broker vs. investment banker
CPA
Internal (under the hood)
3. Preparing to Sell - (05:12)
Sales materials - NDA, Teaser, Seller Presentation, Seller’s Disclosure Statement
4. Marketing - Indirect and Direct - (09:35)
Listings vs. sales process
5. Screening and NDAs - (12:44)
When talking to prospects initially we’ll generally provide basic information about the business. Sometimes this is in the form of a one-page “teaser.”
6. Due Diligence - (13:58)
7. LOIs (Letters of Intent) - (18:35)
Most deals use them
Prepared by buyer
IoT
8. Selection and Structure - (21:21)
Determine if a buyer who expresses a desire to buy your company is capable of getting the deal closed
9. Negotiating, Preparing, and Signing Final Documents - (23:45)
Starts at the end of Second Level DD - begin to negotiate the purchase agreement and other ancillary documents (e.g., bill of sale, seller loan if you agreed to carry some financing for the buyer, etc.).
10. Closing - (26:33)
Prepare to be underwhelmed
There are other steps in the M&A process - management presentations, auctions have their own stages and inflection points intended to systematically move buyers through a bidding process, and meetings with professional advisors. We may coordinate meetings between you and the acquirer, talk to your accountants and other professional advisors about different transaction structures, or perform a formal valuation of your business. And, not every M&A transaction follows this set path at all. Mergers and acquisitions are a high-intensity and often emotional process. To get you where we want to go, we’ll remain fluid.
_____________________________________________
Have questions? Book a call, and talk to Brett today:
clarity.fm/brettcenkus
_______________________________________________
You can reach Brett through:
clarity.fm/brettcenkus
/ brettcenkus
/ bcenkus
www.cenkuslaw.com
braatenwoods.com
merger-resources.com
_______________________________________________
Brett A. Cenkus has 20+ years of experience in business law, finance, and entrepreneurship. Through Cenkus Law, PC, he provides advice and services for mergers & acquisitions (M&A), securities offerings, founders’ agreements, and other general business law issues.
Through Braaten Woods, LLC, Brett helps business owners in the lower middle market ($2MM - $25MM) position themselves for sale, find buyers, negotiate, and close M&A deals.
Brett also maintains merger-resources.com, a site packed with free articles, videos, checklists, deal diagrams, template contracts, and other tools to help pass M&A knowledge to others.
Brett regularly consults with entrepreneurs and invests his own capital as an angel investor.
From 2010-2013, Brett served as Chief Legal Counsel of a publicly-traded international oilfield services company. From 2001 to 2006, he and a partner founded and built Paragon Residential Mortgage. Bridge Investments acquired Paragon in 2006.
Brett holds a Juris Doctorate from Harvard Law School and a Bachelor of Arts degree in Economics from Messiah College in Grantham, Pennsylvania.
Brett lives in Austin with his wife, Cathryn, and two children. He enjoys reading, squash, classic movies, great food and wine, and the New England Patriots.
#corporatelaw #mergersandaquisitions #businesslaw #corporatelawyer

[@JScott288]

For my money, the best M&A content on KZbin. Great job of making complicated things accessible.

[@hunterhelms8378]

Brett, I enjoy your videos and the information you provide. I was curious if there is anyway I could message you with some questions about M&A? Thanks

[@tenzinchoegyal7403]

Given the informative value of these contents/videos, this channel deserves way more subscribers. Welcome back Brett! Perhaps now (Post-Covid) more than ever, people are in search of contents like these that covers a whole range of topics around understanding business finance from a real life experience prospective. Thanks again for sharing all your experience and knowledge 🙏

[@BrettCenkus]

Thank you, and you're welcome.

[@amand1518]

Please do the follow up video from Buyers' perspective!!! 🙏🙏!! Very informative content !! Thanks!

[@SoulfeastKatieLove]

Your videos are amazing, so grateful. THANK YOU!!

[@KingHerring]

Thank you

[@juan.felix.k.]

This has really helped me. Thx for the video.

[@kanchithakkar8471]

Such amazing content.... really grateful.... thanks for sharing such amazing insights

[@dapperduane]

About time we get some more Brett!!! :)

[@brettnorris3140]

Hey Brett! Just wondering if you might be able to make a video on emerging ai technologies and their impact on the profession, for you, senior lawyers, and the junior lawyer job market. More specifically what the relationship between what an ai can do and the skills that human lawyers must possess and how this relates to experience in the field. This concept is extremely hazy for pre-laws like myself who don't know what the practice of law really entails. There are videos online of people commenting on this subject, but you seem to have more nuggets of practical wisdom that seem to be overlooked in most peoples analyses regarding these topics. Thank you

[@haykeg.7507]

Thanks for all your videos

[@BrettCenkus]

You're welcome!

[@claytonarmstrong1544]

This is my favorite page to follow!

[@BrettCenkus]

Thank you!

[@alphatech1031]

Can you give us career advice Brett? How about mba holders with 5-10 years in finance that want to do transactional legal function in m&a. What advice would you give to transition?

[@Mindsaw]

You shared valuable insights there man!

[@BrettCenkus]

Thank you!

[@Mindsaw]

@@BrettCenkus You're welcome! Are you looking for a guest on your channel?

[@rorronoazorro6107]

Hi Brett, would like to ask you - when buying a business (small to medium) do I have to be/ own a company to which I do acquisition?

[@BrettCenkus]

That is not a strict requirement, and it ultimately depends on the acquisition structure (asset purchase vs. stock/equity purchase vs. merger). With the first and last (asset purchase, merger), you would need a company (entity), although it could be newly formed, possibly even formed right before the deal closes.

[@christiancontreras2838]

How do you get an internship or gain experience in order to end up as a corporate lawyer?

[@richreviews1279]

Great Video Brett,👍👍 Me my myself I'm actually looking very strongly in a Cleaning business the purchase price is £200,000 and the profit their making yearly is £50-55k. but they want at least half of the Purchase Price up front and the rest I can pay through seller financing I’m assuming through the cash flow of the business. looking at these numbers Do you think it's worth it? My questions is with the purchase price how would I pay, would it be from the bank of the business or a bank I could find myself to take out a business loan to fund the deal? Thanks Brett look forward to hear from you👍

[@BrettCenkus]

If those earnings (the profit) are solid and reflect fair comp for work done by the owners, and there are more than nominal add-backs to calculate EBITDA or SDE, the price is at least good (i.e., it's for sure not a bad price if we have net upward adjustments). The seller's willingness to finance 50% of the purchase price is a significant factor in evaluating the opportunity. If the business is growing nicely (probably not the case, given its size unless it's fairly new) or has notable fixed assets, those would be additional pluses. So, again, based on the little I know, it looks like a good deal, and it may be better than that. Regarding financing the 50% upfront payment, it would be tough to finance all of that through a bank. Most lenders require borrowers to have some "skin in the game." FYI, the SBA (with some of its loan programs, at least) will recognize a gift that does not need to be repaid (e.g., from your parents) as a down payment. If you have 5-10% to contribute as a down payment, that would change things considerably, making bank financing a potential option. Another approach is to raise money by selling equity to private investors, e.g., friends and family financing. These investors are often very flexible on terms and may be okay with you not contributing cash at closing. In theory, other creative options exist, e.g., equipment or A/R financing upfront. In practice, we see financing companies require a minimum of six months of business ownership. However, there are so many companies I don't know that provide these types of financing products, so I wouldn't rule them out. Brett

[@nathan4658]

քʀօʍօֆʍ 🙄