Question of the Week: What is the process to sell a company?
The process is different for every company depending on the structure and type of buyer, but all transactions follow the same general outline: planning, marketing, deal making, and closing. At Murphy, we further break down the process into 25 unique steps (see “How long does it take to sell my business” and “How can I speed up the process of selling my company”). In the Planning phase, your broker will gather information on your company and financials, develop a valuation, and write up the confidential memorandum. The more work that is done in this phase, the smoother the entire process will go. In the Marketing phase, your broker will reach out to potential buyers and advertise your company (without disclosing your company). The broker will obtain a non-disclosure and financial profile from interested buyers and then send them the confidential memorandum and answer their questions. During the Deal Making phase, your broker will help you negotiate an offer, work with bankers, and prepare for the Closing Phase. In this phase, your broker will coordinate the due diligence process and work with attorneys and accountants to prepare the final agreements and closing documents. Then: Closing!
Next week: What is my company worth?