Selling your company

When selling a company, one may choose to sell the company to one or more members of the existing staff. This is also known as a management buyout. More information on a management buyout can be found on this page.

If you want to sell your business then a family member, such as your son or daughter, may want to take over the business. More information on business transfer to family can be found on this page.

The various steps on this page are based on a sale process to a third party. This is what we ourselves as acquisition advisers also deal with most often. It may be that you already have a buyer in mind or that a potential buyer has approached you. But it could also be that you have not yet identified any potential buyer(s) and are therefore still at the very beginning of the process.

A strategic buyer is a company already operating in the same industry or a related industry as your company. They are parties with growth ambitions within their own industry and parties looking to expand their current business activities. This buyer has a strategic motive for the acquisition, such as creating synergy benefits, and will therefore base its choices on pure returns to a lesser extent compared to a financial buyer.

A financial buyer is usually a private equity firm (or private equity party). These parties are investors and look closely at current returns and expected future returns. Financial buyers will not quickly sit in the entrepreneur’s chair, but will instead be involved strategically and financially. A financial buyer may also want to appoint a new management for your company or they may want to add your company to an existing company in their portfolio.

A management buy-in candidate is an individual (or group of individuals) who takes over a company as a new challenge. Often MBI candidates are managers or directors with a considerable track record or former entrepreneurs who want to go back into business. They often take their own seats on the existing board and will be actively involved in the business. Generally, this type of buyer is looking for a new challenge in an industry in which he or she already has experience.

In a sales process, it is important that there is a mutual click between our advisers and the party we accompany. During the introductory meeting, we introduce ourselves and tell you more about our services, our organisation, our approach, experiences and references. In addition, during the introductory meeting, we like to hear more about you as an entrepreneur and your company. We discuss your situation, wishes and objectives you have in the context of the intended sale. We also discuss with you what the best sales strategy is for your company, given the reasons and objectives.

After we have determined the sales strategy, we carry out a valuation prior to the sales process. This helps to enter the sales process with the right expectations and goals.

After finalising the valuation, the documents that will later be provided to potential buyers are prepared. These can include an anonymous profile, the procedure letter, the confidentiality statement and the information memorandum. In addition to mapping all content, we also ensure that the documentation is attractively presented, which helps with convincing potential buyers.

One of the conditions of a buyer that is always included in a Letter Of Intent is to conduct a due diligence. In the due diligence, the potential buyer can check the correctness of the information already provided, go deeper into various topics and ask additional questions. A due diligence usually involves further investigation into the financial, tax, legal, personnel-related and commercial aspects of the company.

After we have answered all additional questions from interested parties and conducted the follow-up talks, a non-binding offer (NBO, or non-binding offer) is requested. In an average sales process, around 5 to 8 parties submit an NBO. An NBO includes information about the buyer’s reason for interest, the buyer’s future plans for the company and for you as a shareholder, the purchase price offered, the financing and payment structure, resolutive or suspensive conditions and a time schedule.

When several non-binding offers are received, the negotiation process follows. A selection is made of the best two to four indicative offers, with which we then enter into negotiations. Our aim here is to maintain a healthy dose of competition in the process and to optimise the bids. We do this by giving a management presentation to all parties, in which we zoom in on recent developments and reiterate the company’s opportunities. We then ask the parties to make a final, adjusted and final offer. After this, as the seller, you choose the party with which to continue the process. You will make this choice on the one hand, of course, based on the bidding conditions, but also largely on the basis of your feelings about the potential buyer.

Once you have chosen the party you wish to proceed with, a Letter of Intent (LOI) will be drawn up by our in-house lawyer. The LOI sets out on paper the agreements that have been made.

After the documents have been drawn up, it is time to identify suitable potential buyers. We do this by compiling a list of all the (international) parties we expect to be potentially interested in acquiring your business. This so-called ‘longlist’ usually contains 30 to 50 potential buyers.

After the longlist has been drawn up, we discuss it together. It often happens that a selling party does not want to include certain parties in the sales process from a personal or strategic point of view. These parties are dropped. As a seller, you yourself may also want to add parties to the shortlist. Ultimately, there will be between 15 and 25 parties on the ‘shortlist’ that we will approach for you. As soon as the shortlist has been finalised with you, we will start approaching the parties. If you are interested, we will send you the Anonymous Profile.

This is the final step in the sales process. At the closing, the formal transfer of the company takes place at the notary. The transaction documentation is signed by both parties and the purchase price is transferred to you as the seller. After this, the moment is there to toast to a bright and healthy future together.

The first option is to sell your business independently. If you have a small business with a relatively low expected transaction value (0.5M<), selling your business yourself (possibly with the help of your accountant) could be a good option. The risks are then relatively manageable. You could then offer your business on an online business sales platform such as Brookz or Bedrijventekoop.nl, for example.

The second option is to engage an acquisition advisor. When the expected transaction value of your company exceeds 0.5M, it is always advisable to involve an acquisition advisor. After all, the stakes are high, and the acquisition process quickly becomes a lot more complex the bigger the deal. In addition to finding the right buyer (or when a potential buyer has already come to you), an acquisition advisor will also help you with financial and legal matters such as detailed valuations, drafting the sales documentation, the often complex negotiations, legal contracts, tax aspects, financing and due diligence. In addition, an acquisition advisor also supports you on a personal level and distinguishes emotion from reason. A sales process is generally a journey of around six to 12 months. This is a time-intensive period during which the company also has to keep running. A takeover advisor will relieve you as much as possible during this period.

Entrepreneurs often wait until they themselves come across a suitable buyer for their business. However, this leaves you dependent on who you happen to bump into. If you approach potential buyers yourself (or your takeover advisor), you can search much more specifically for what type of buyer you really want. And market forces also play an important role in this. The more parties interested in your company, the better your negotiating position in the end.

Selling a business is something you don’t do every day. For an acquisition adviser, it is. There are many different financial and legal technical aspects involved in a sale. But an acquisition advisor also plays an important role in aspects such as emotion and finding the right buyer.

Try to look rationally at the whole position and situation of your company. Having a positive feeling about a potential buyer is very important, but remain critical throughout the process. Emotion is often a poor counsellor and can lead to the wrong choice.