Sell-Side Transactions Advisory
for mid-cap companies
Negotiating with Buyers
Our Expertise
Adveez assists privately held companies and their shareholders (Sellers) in selling share capital to Private Equity (PE) investors (Buyers).
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We focus on the middle-market sell-side
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We advise Sellers of European mid-cap companies with EVs of up to € 300 million
We have access to C-suite level at more than 100 private equity funds.
We precisely know their investment strategy and sector focus.
A give-and-take deal between PE investors and Sellers
Private equity investors have an edge:
They routinely buy and sell companies according to their investment objectives
Business owners have their own strategy:
They operate and grow businesses for a living and build assets private equity investors covet.
In this give-and-take, Adveez helps the Seller to get the upper hand on the Transaction
Adveez Private Equity Transactions Sell-Side Advisory
Our team has been engaged in the Private Equity business for more than 30 years:
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We are insiders from both sides of the Private Equity buy-sell equation, and we are familiar with all the issues faced by those engaged in, or considering, a Private Equity middle-market buyout process.
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Thanks to its strong insight into the Private Equity Environment, Adveez will help Company Sellers navigate through the sometimes murky waters of middle market transactions.
Our advisory practice is skilled in optimizing deals and acting as a trustful partner for the Company's Shareholder and its management team.
Illustration of the Deal Process
Our private equity and corporate finance experts can build up significant value to the deal by doing the following:
Steps
Description
Preparation
Adveez works closely with the Company’s Seller and senior management team to obtain an in-depth understanding of the Company’s current business and future growth opportunities in order to facilitate its role as the primary contact for Investors.
Understanding the Company's business model, competitive position and corporate functions
Identifying and dealing with potential obstacles to the sale transaction
Analyzing strategic rationale for various Buyers/Investors groups.
Assisting the management to draft the historical and projected financial documentation
Compiling and reviewing Data Room information
Providing valuation analysis to assist Investors evaluations
Preparing marketing materials, including: the preliminary non naming short introduction of the Company (Teaser), the Executive Summary (ES), and the Confidential Information Memorandum (CIM) of the Transaction.
Selecting and finalizing a short-list of potential Buyers/Investors/Prospects with the Seller
Marketing
Approaching potential Buyers/Prospects at C-suite level and sending the Teaser
Ascertaining Prospects interest in a potential Transaction
Following up with Prospects and sending the ES and NDA
After execution of the NDA, sending Prospects the CIM, and planning/organizing the due diligence process
Initial Investor Due Diligence
Adveez assists the Prospects and the Seller to perform the Initial Due diligence
Sending the interested Prospect a “Bid Process Letter” (BPL) outlining suggested timing and procedures
Company Presentation
Adveez organises meetings of the interested Prospects at the Company's offices
Company CEO and CFO give Prospects a detailed management presentation covering strategy, operations, product development and financials
Secondary Investor Due Diligence
Adveez helps the Seller communicate information to Investors for their Secondary Due Diligence
Giving Investors access to an online data room and facilitating the performance of their Secondary Due Diligence
Evaluation of the Investors' Offer
Adveez assists the Seller to solicit Letters of Interests (LOI) from Investors
Assisting the Seller to solicit Offers, Bid for purchase price, and suggested term-sheet of the Transaction from Investors
Assisting the Seller to evaluate Investors' Offers
Assisting the Seller to select a prevailing Buyer and to enter into an Exclusivity Period of negotiation
Negotiation & Closing of the Transaction
Adveez assits the Seller in the Final Due Diligence process of the Selected Buyer
Assisting the Seller to structure and close the Transaction
Assisting the Seller and its legal counsels to draft, negotiate and execute with the Buyer the Stock Purchase Agreement (SPA) and the ancillary documents
Ensuring timely follow-through and settlement of post-closing obligations
The investors
Investor type
Benefits
Consideration
Strategic Investor
Is most likely to pay the Seller the greatest amount of upfront proceeds
Stock or earn-out components can provide opportunities for future upside
Most strategic Buyers seek to buy 100% of targets
If the strategic Buyer is a competitor, due diligence process would require the Company to share sensitive information
Private Equity Investor
Private Equity investments can be structured as minority or majority control transactions
Allows the partial Seller/Entrepreneur to participate in the future upside of the Business
Even if structured as a minority investment, strategic Buyers will most likely demand some amount of control provisions
Less upfront proceeds to the Seller/Entrepreneur
Transaction Types
Below are two sample process types:
Negotiated Sale
Targeted Solicitation
Mechanism
Identifying 2-5 most sensible Prospects
Contacting these Prospects, sending Company information, and negotiating until an offer is accepted
Identifying group of 20-30 most likely Prospects
Contacting these Prospects, sending Company information, and requesting indications of interest
Competition
Negotiated
Competitive
Pressure on Investors
Least
Moderate
Confitentiality
Most confidential
Confidential
Timing
Rapid if optimal candidate is identified; however, Investor dictates process and can introduce delays
Moderate
Advantages
Opportunity to capture preemptive value
Opportunity to accelerate closing
Greatest confidentiality
Reduced risk compared to auction
Signals credible alternatives to ultimate Investor
Maximum flexibility in timing and Investor selection
Disadvantages
Serious loss of negotiating leverage with subsequent Investors if first Investor walks out
Less ability to dictate terms and timing
Not effective when logical Investor is not known
More difficult to close in a timely manner
Difficult to sustain competitive Investor interest
Adveez assists the Seller (shareholders) to craft a process, that accommodates their conditions for terms optimization, speed of execution, and confidentiality
Assisting the Company before the Transaction Process
It is critical that both the Seller and his Business be well prepared ahead of the Transaction process. Adveez assists the Seller to present his business in the best possible light:
Issue
Rationale
Ensure Financials are ready & in order
Most potential Investors will require either reviewed or audited financial statements
Having Company's financials either audited or reviewed prior to the process will reduce the length of the diligence process
Review Corporate Documents
Make sure all corporate documents (partnership agreements, by laws, etc...) are up to date and reflect the current understanding among Shareholders
Properly document any informal or verbal agreements that are important to your business
Make Operating Metrics Readily Available
Potential Investors will want to understand the key operating metrics of the business
Being able to quickly access this data and valuation parameters will give to potential Investors increased confidence in the business and give the Seller more flexibility in negotiating terms
Develop a Clear Rationale about Why the Seller is Pursuing the Transaction
Potential Investors will want to understand why the Seller is choosing to pursue the desired Transaction now
The Seller being open and upfront with the Transaction rationale early in the process will help weed out potential Investors who may not agree with this rationale, and saving both sides significant time and effort