3 vital components for a successful deal completion
Market factors inevitably play the most significant role in successful deal completions. Industry conditions, the state of local and global economies and country specific governmental legislative environments will largely effect demand and realized value upon any company sale.
There are, however, other more specific factors, unique to each transaction, which will play a huge part in the eventual outcome of each sale. One such factor is the capabilities of the company sales advisor instructed to manage the sale process.
Company sales advisors have a huge impact on the overall value and structure of each deal. It is the advisors responsibility to ensure that they fully understand the owner’s objectives as having a thorough appreciation for the owner’s future plans enables them to negotiate the best deal possible, not just in terms of value, but also regarding the most appropriate structure.
In our experience, we have found that, in addition to the more obvious capabilities of company sale advisors such as experience and knowledge, there are other factors which greatly enhance the possibility of a successful exit. Below, we have identified three key factors which are often not considered or considered to a lesser extent by owners when they select a company sale specialist to manage the sale of their company.
In order to ensure that the company sale progresses smoothly and maintains momentum throughout the process high levels of attention are essential. This is particularly the case come the marketing and negotiation stages, when swift action is needed following up on any interest or to preempt any potential pitfalls.
This proactive approach is uncommon within the traditional broker business model where deal teams handle large portfolios and as a result do not grant clients the necessary levels of attention in order to react to or preempt potential issues which may arise.
Benchmark International’s corporate finance deal teams have a maximum of fifteen companies within their portfolio at any one time and each consists of at least five members including a senior deal leader, deal executive, researcher, sales documentation writer and prospect generator. Each team is supplemented by our experienced directors who are heavily involved throughout all stages each imparting their specialist knowledge upon each respective stage of the process. Our model allows for increased levels of attention and focus for each of our clients and plays a significant role in our high success rates.
In order to remain hands-on with the management of each company sale it is essential that advisors maintain a presence local to their client. Local advisors will generally maintain closer relationships with their clients, their clients accountants and their lawyers resulting in a greater appreciation and understanding of the business and the owners objectives.
Whilst the research and marketing phases can be undertaken remotely, local advisors commonly implement a more proactive approach come the meeting and negotiation phases of the process. The majority of deals will at some stage look like they may hit a stumbling block and it is in these situations where local advisors benefit from having the ability to react quickly via face-to-face interactions in order to get the deal back on track.
It is impossible to guarantee that an owner has received maximized value for their company if the opportunity hasn’t been presented to all potential acquirers. In an increasingly globalized economic environment increasing numbers of cross-border transactions are being completed and with this in mind, business owners seeking an advisor to manage the sale of their company should always engage a specialist with international marketing capabilities.
Baring in mind the above factors, particularly location and scope, Benchmark International have developed a global local business model. With offices located across each major continent, each is manned with local M&A professions leading the sale of companies and sourcing acquirers. This approach has been hugely successful for us in terms of deals converted as we possess the capabilities to maximize the marketing breadth and impact. By bringing more potential acquirers to the table we can ensure competitive tension is at its height which in turn allows for increase deal values.