15 April 2025
Selling a business is often a life-changing event and the process can be complex and challenging. With careful planning and the right approach, you can maximise the chances of achieving a great result.
At Translink Corporate Finance, we have an impressive track record in assisting the shareholders of owner-managed businesses in successfully navigating the sale process with strategic trade buyers located across the globe.
Translink Corporate Finance UK Partner Will Holmes has shared his thoughts on five essential parts of the sales process, from preparation through to due diligence.
- Preparation, Preparation, Preparation
Business owners typically get one chance to sell their business, so it is important to assess whether the business is in an optimal position to begin a sales process and understand whether it is beneficial to address certain factors first.
In the build up to a transaction it is worth identifying areas where the directors can focus their efforts, in order to maximise value on an exit whilst addressing any key risk factors that could either erode value or reduce the appeal to potential buyers.
Thorough comprehensive preparation, we can typically ensure a smoother process and increase the chances of a successful outcome. A wide range of factors can be considered during the preparation phase, including:
- Working capital management
- Addressing commercial risk areas, such as customer/supplier reliance
- Assessing the strength and depth of the management team
- Evaluating the future strategic plan
- Availability of data points and financial/operational metrics
- Initial buyer research and screening
Finding the ‘perfect buyer’ isn’t straightforward, especially if the pool of potential buyers is spread across the globe. Advisors with true global reach that have teams based overseas who are experts in their local markets will help to identify and effectively engage with the most relevant buyers on an international basis.
It is important to assess the strategic fit of your business with that of potential buyers, which means having a clear understanding of the value proposition and where your business sits in the value chain, to determine who would benefit from acquiring the business and why.
Another key factor to consider is cultural alignment. Assessing the values and cultural fit between a buyer and your business is essential to ensure a smooth transition, especially if you have a role in the business going forwards. This can be very difficult to assess from desktop research but should become clearer in time spent with a buyer.
- Marketing your business
Successfully selling an acquisition opportunity to a strategic buyer requires careful positioning, impactful marketing materials and effective communication with key decision makers.
‘Warm up’ conversations with potential buyers help to establish initial interest and ensures that the opportunity is placed on the radar of potential buyers in advance of marketing materials being distributed. These conversations can help build rapport, assess the buyer’s appetite, and set the stage for negotiations down the line.
An advisor can help produce high-quality sales documentation that clearly articulates the value drivers of the business and key selling messages, often accompanied by a pack of financial and operational data, to support the buyer’s decision-making process.
Presenting these materials in a way that resonates with the buyer, highlighting how the opportunity aligns with the buyer’s goals and strategic objectives, in a way that emphasises its unique value, will help drive a higher price.
Working with an advisor who has teams based overseas will help bridge any cultural or language barriers when dealing with international buyers, whilst maintaining high-quality and effective communication.
- Valuation and deal structuring
Enterprise valuation is often a key metric which business owners focus on, but the wider deal structuring terms and adjustments to equity value are critical points of detail that should not be overlooked to ensure the deal achieves the best possible outcome for the shareholders.
Understanding the finer deal structuring terms in context of the overall transaction and headline price is important, the devil is often in the detail when it comes to these points. Some wider things to consider include:
- Deferred consideration – how much on day one vs how much in the future
- Contingent consideration – performance targets attached to earnouts
- Adjustments to equity value – what adjustments are being made to the headline price
- Lock in period post-deal – how long are you/your team tied in for and the terms attached
By effectively engaging with multiple buyers and running a competitive sales process, you can create an environment that helps to further drive the value and improve the wider deal terms.
Having an SPA Advisory expert work alongside and support your chosen legal provider can help mitigate risk and ‘road-test’ the contractual mechanisms in the legal documents to check whether they achieve the desired outcomes, especially where earnouts are involved.
Often, it is a combination of multiple factors that should be considered prior to choosing a preferred party to move forwards with. This decision requires careful consideration, weighing factors such as the financial offer and wider deal terms, the cultural fit with the buyer and their plan for the business, and the overall fit with your objectives.
- Due Diligence
The due diligence phase can be comprehensive, covering a range of areas including financial, legal, commercial, management, intellectual property, and any other critical aspects relevant to your business.
Any known potential issues should be addressed prior to this when there is still competitive tension in the process between multiple potential buyers, so that no skeletons are uncovered during the due diligence process that could impact the buyer’s confidence or negatively impact the deal price or structure.
The diligence process can be arduous and time consuming, coupled with the demands of continuing to run the business and maintain financial performance during a critical part of the deal process. Your advisors can share some of the burden through the diligence process, but thorough preparation is advised to navigate this phase smoothly and efficiently.
Translink’s role extends beyond “just facilitating the deal”
Translink Corporate Finance work meticulously on every detail from the start of the project until we close the deal, providing support and advice through every step, and ensuring that you can continue to focus on running your business without being overwhelmed by the details of the transaction.
If you’re thinking about selling your business, contact our team of expert corporate finance advisors to help deliver a successful transaction for you. You can contact Will on wholmes@translinkcf.uk.com
