Sales Process Overview

In a Sell-Side engagement where the client is selling a company, Grand Avenue Capital Partners conducts a comprehensive transaction process for the Company, which will include the steps below. The time required to conduct the sales of a corporate entity will vary, but can be 4-12 months, depending on the complexity of the assignment.

Phase 1:

Preliminary Due Diligence, Research, Long Range Plan Development and Valuation

In this first critical phase, Grand Avenue will develop a thorough understanding of the Company, its current and future business opportunities, competitive strengths and weaknesses, and specific factors that an acquirer would find valuable. As part of its due diligence, Grand Avenue will:


  • Conduct in-depth interviews with senior management
  • Identify valuable attributes Sell-Side client company offers to potential acquirers
  • Define the elements and financial results of the Company’s long range plan (up to 5 years out)
  • Quantify the synergies, cost savings, etc., potentially achievable by strategic acquirers

Phase 2:

Preparation of the Offering Memorandum and Marketing Planning

Grand Avenue will prepare concise, compelling presentation materials of the highest quality to introduce the Company to key contacts. During this phase, which runs concurrent with Phase 1(above), Grand Avenue will:


  • Start developing a prospect list of strategic and financial buyers
  • Highlight competitive advantages and key attributes of sell-side client company without compromising trade secrets or competitive advantages
  • Develop an anonymous Corporate Profile from the Executive Summary that will be sent with Confidentiality Agreements to prospective acquirers

Phase 3:

Marketing

Grand Avenue will conduct a multi-tiered marketing campaign on behalf of the Company with direct, personal contact with strategic buyers, direct personal contact with financial buyers and private equity groups, confidential internet M&A services, confidential trade and business opportunities advertising. Grand Avenue will create a competitive marketing environment and will:


  • Obtain NDAs from all interested parties before disseminating Offering Memoranda
  • Effectively communicates the Company’s vision, operating and financial capabilities, and answers to questions to key decision makers
  • Screens serious buyers and coordinates facility visits with Sell-Side client company management
  • Following facility visits, the interested parties will be asked to submit letters of intent

Phase 4:

Buyer/Seller Contacts, Negotiation and Structuring

Grand Avenue will lead the negotiations with serious bidders, and assist in the negotiation of the letter of intent. Grand Avenue will advise on the following:


  • Structure of the proposed transaction
  • Consideration and proposed terms
  • Form and timing of any type of proposed deferred compensation
    Coordination of employment contract issues with key Company executives, if appropriate
  • Negotiate all other relevant terms in the letter of intent
  • Coordination with appropriate legal and tax counsel
  • In the event of multiple bids, negotiate strict time-dependent milestones in order to obtain the optimum transaction. At all times, Grand Avenue shall maintain momentum with prospects to minimize delays prior to standstilling the marketing of the Company

Phase 5:

Oversee/Manage Buyer’s Due Diligence*, continued Negotiation

Grand Avenue will coordinate and participate in all substantive due diligence meetings with the selected acquirer. The key role is to maintain momentum, solve problems that invariably arise during the due diligence process. During this time, Definitive Agreements are being drafted, reviewed, and additional negotiation occurs with respect to legal details, indemnifications, representations and warranties, etc.  Grand Avenue will remain involved during these negotiations working with legal counsel from both sides, and with financial advisers of the acquirer. Grand Avenue shall manage this process to ensure adherence to a strict timetable in order to keep all parties focused on closing the transaction.

Closing the transaction


(*) Grand Avenue clients should be prepared for due diligence by the potential acquirer. As part of its services to the client, the Grand Avenue investment banker will conduct initial due diligence as part of the Confidential Investor Memorandum that is written by Grand Avenue which contains the following:

TYPICAL OUTLINE OF CONFIDENTIAL INVESTOR MEMORANDUM

SELL-SIDE ENGAGEMENT

Table of Contents


  1. Executive Summary
  2. Industry Overview
    • Supply/Demand for client’s products
      Competitive landscape in which client works
      Industry trends, exogenous factors, legislation,
    • Client’s Specific Competitors
      Brief overview of top 5 competitors, what are our client’s strengths / weaknesses vs. competition
  3. Client’s core competencies
    1. Sales, Marketing and Customer Service
      Sales organization, staffing, locations
      Key Customer Profiles
      Historical revenues, market shares
    2. Description of Products and Services
    3. Specific Operations
    4. Equipment
    5. Facilities
    6. Customer Service
    7. Key suppliers and vendors
    8. Quality control and assurance
    9. Insurance: property and casualty coverage
    10. Employee Benefit Programs and Labor Relations
    11. Legal issues and lawsuits
    12. Environmental Issues
    13. Management Information Systems
    14. Community and Government Relations
    15. Intellectual Property, trademarks and patents
  4. Organization and Management
    • Senior Management Biographies
    • Personnel
    • Organization Chart
    • Current Board of Directors and Biographies
    • Shareholder Profiles
  5. Historical Financial Performance
    • Consolidated Company Performance, last three years and current year to date
    • P/L Analysis and Discussion
    • Revenue Analysis and Discussion
    • Margin Analysis and Discussion
    • Balance Sheet Analysis and Discussion
    • Cash Flow Analysis and Discussion
  6. Long Range Plan (LRP) and Forecast
    • Principal assumptions and business plan for next 5 years
    • P/L, B/S, Cash Flow, CAPEX
    • Graphs and charts
  7. Conclusion and Investor Guidance
  8. Appendix
    • Complete financial statements, last three years with notes and explanations
    • A/R, Inventory and A/P details
    • Asset Schedule
    • Detailed marketing materials and product line sheets