10 October 2018
What was the situation?
A client with its own M&A team had, after extensive negotiations and due diligence, decided to abort a sale of a high profile and profitable non-core division. The potential acquirer had sought to reduce the price.
Almost a year later, they now needed to recommence the sale process and sought outside advice. They wished to ensure that if the process recommenced it would complete this time.
How we helped
We spent some time with management understanding the business, the profile of contracts and the stream of wins anticipated over the next six to nine months. The business expected to have a growth spurt at the time a sale was likely to complete as well as an improvement in profitability. The business had a strong management team and, having been through the process already, it was ready for due diligence.
We restarted the sale with fresh information and a mixture of old and new suitors who had expressed an interest in the business. After a selection process, a number of offers were received, including an offer from the previously rejected bidder.
After some deliberation and negotiation it was concluded that the previous bidder would be given a second chance. Their offer was at the top of the range of offers received, they knew the business well, had undertaken due diligence before, their approach was understood and the backers were a known entity. They also knew how a price chip would be received.
Whilst the trust on both sides was in short supply, every care was taken to ensure that there were no surprises and that a second aborted sale was unlikely.
The end result
The potential acquirers (and their ultimate shareholders) were carefully managed and the deal completed successfully in the same timeframe that any other party could have achieved. However, the price achieved on the sale was 25% higher than any previous offer and on improved terms.
For further details on restarting a sale process, or if you are interested in similar services for your business, please contact Andrew Millington or fill out our contact form here.
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