Transaction process in business succession
documentation and document preparation.
The first step involves an understanding of your plan by the Edelweiss transaction team. We need to understand your company and your succession plan in depth. In doing so, it is important to work out your strengths, products and services, unique selling points and your positioning in the industry together with you. In this way, we create a so-called “storyline” that presents your company as an attractive target for strategic buyers and financial investors. The initiation of the company sale is thus carried out according to your criteria and within the framework conditions you have defined with us.
The most relevant factors within the initial assessment are the company’s net assets, financial position and results of operations, so that a meaningful and solid preliminary assessment regarding the company’s valuation can be made already in the early stages of the process.
All documents and records provided by you from the “information request list” are stored confidentially in a virtual data room (VDR). This gives the potential buyers parallel access to the documents during the bidding process, after signing a confidentiality agreement and in the course of the transaction, so that they can finally carry out their due diligence.
2. Preparation of external sales documents and investor approach.
The aim of the second step is to approach investors. For this purpose, a list of all potential investors from Germany and abroad is compiled at the same time as the first step – the so-called “long list”. Subsequently, in close cooperation with the client, this list is “cleaned up”, i.e. unwanted and unsuitable buyers are removed from the list. The final product is the qualitatively selected “short list”, which contains all potential buyers that our M&A experts will approach for our client.
The sale documents prepared by our team as part of the process initially include a three to four page anonymous teaser and a non-disclosure agreement (“NDA”). Then, the Information Memorandum (“IM”) is prepared, presenting your company in a multi-faceted way from all angles and over several chapters. It is important to present the company’s position within the industry and to identify future value enhancement potential. Parallel to the commercial due diligence, a financial factbook is often prepared (“FFB”), in which all financial figures and facts are presented, analyzed and commented.
3. Approaching potential buyers
Investors are approached primarily with the anonymous teaser and the non-disclosure agreement (NDA). After potential buyers have expressed their interest and signed the confidentiality agreement, they are sent the information memorandum with the process letter. In this letter, the key dates of the process and its course are presented once again. These documents form the basis for the first indicative assessment (LoI) on the part of the investors. A decision-making window of approx. 3-8 weeks after sending the “Info Memo” is provided for this purpose.
4. Exchange of information and coordination of due diligence Edelweiss Corporate Finance at your side
After receiving the indicative offers from the potential buyers, we will discuss them together with our client and coordinate with each other to continue the process with suitable, selected buyer companies. In the subsequent “due diligence” phase, our transaction experts will coordinate and assist the entrepreneur and the buyers in all relevant issues. Once the initial discussions have been initiated with a successful due diligence, Edelweiss prepares the “Management Presentation”, which is presented by the management on specific dates during “Site Visits”. These represent the first official meeting between the management of the seller and the prospective buyers.
5. Receipt of the binding purchase offers and selection of the suitable buyer.
After completion of the due diligence, the in-depth round for open questions, the so-called “Q&A”, the next step is the deadline for the potential buyers to submit a binding offer / “Binding Offer”. This is usually done on the basis of the first, indicative purchase offer. After that, it is necessary to discuss these offers together with the entrepreneur and thereby crystallize the suitable buyers. Under our premises of maximizing the sales price and preserving the values and norms of your company, we search for the best buyer for your life’s work together with you according to your wishes and ideas.
6. Contract negotiations and closing of the corporate transaction “signing and closing”.
A successful conclusion of a corporate transaction also includes successful contract negotiations with the final prospective buyers. Edelweiss is always at your side with the entire transaction team. With negotiation skills and a clear structure, we are able to shape the transaction according to our client’s wishes and to ensure that the contract is concluded in a way that is fair to both the seller and the buyer.
We take you by the hand and walk you through each step of the succession process with the utmost precision, discretion and confidentiality, always taking into account your wishes and ideas. These are values that underpin our philosophy at Edelweiss. Our primary goal is to be able to guarantee you a high probability of closing and securing the succession of your life’s work.