Preparing for a Sale

Page 2

To the extent that selling your company is planned for some time in the future, addressing the above attributes and incorporating them into your operations now will go a long way to ensure meeting your financial objectives when the time is right to sell.


A major step in readying your company for market is the preparation of a descriptive memorandum. This document can range from 10 to 200 pages and is an initial compilation of materials hat will be distributed to interested buyers. The key to preparing this type of memorandum is to focus on its intended purpose: Accurately describe the company, its history, products, markets, personnel, facilities and financial performance in a way that highlights your organization's strengths and potential. When prospective buyers complete a review of the memorandum, they should clearly understand the company's unique investment merits, or "investments story."

Your company's investment story is introduced, supported and reinforced in the memorandum. It is designed to have each section build off others, constantly reinforcing the unique investment merits of the company. for example, there are many four bedroom colonials on the market. However, depending on the particular objectives of a buyer, the investment merits of greatest interest could include: a house that overlooks the ocean (location); one with a three-car garage (facilities); one that comes with a butler (personnel); or a house with ten acres of land. (growth potential).

The challenge is to design a selling document that compels potential buyers, particularly corporate ones, to believe that the opportunity to acquire your business is not just another investment, but is a chance to realize benefits and potential that cannot be duplicated in any other way.

From time to time your advisor begins an analysis of your company, preparing the selling memorandum can take four to six weeks. Multiple plant sites or other complications could extend this timetable several weeks.


While the selling document is being prepared, you and your advisor should be developing a targeted buyers list. It is during this process that the advisor's knowledge of the merger & acquisitions marketplace will be extremely valuable.