Iii) Finalising an offer with the preferred buyer - this could vary from one month to several months, depending how many parties are at the table, and level of detail that needs to be included in the offer letter. Also consider how holidays will create bottlenecks in your process, especially around August. Even if the Buyers have an in-house M&A lead, it can still take time for the senior team to review your agency against other opportunities in the market. Although, it usually takes longer than you would hope to get initial feedback, sharing of the Information Memorandum, and initial management meetings.
Ii) Go to market - the process for contacting buyers should be fairly quick, if you have an advisor who knows the market well. I) Sale preparation - with the best will in the world, it usually takes at least 6 weeks to build all the sales materials, lock down the financials and finalise a buyer list Be patient and avoid rushing the process, allow time for buyers to assess your agency with all key decision makers in their business. There is no perfect time to sale (for most people), so you should focus on doing it for the right reasons and spend plenty of time considering the right future for the agencyĢ ⏳THE PROCESS ALWAYS TAKES LONGER THAN YOU HOPEĭeals can be completed in a few months, but it is very rare. ✅ Do work with an advisor to understand the market landscape and likely buyers, and be open to early conversations You should want to work for at least three years post completion and ideally beyond ✅ Do see the sale as an exciting new chapter for the business and your team, rather than just selling out. You’ll get more value/interest when your growth prospects are strong ✅ Do consider selling when you are going through strong growth, rather than when you peak. ❌ Don’t wait until you approach buyers to get your house in order (detailed & accurate financial/commercial information, shareholder alignment, succession planning and clear growth plan)
You might never reach that number, or miss an opportunity when the market timing is right ❌ Don’t have a fixed revenue or profit figure to hit before you considering selling. In reality this is difficult to predict… so, how can you increase your odds? Ideally you align the sale when your business is on the up, also when buyers are actively looking for your profile of agency, and they are willing to pay a premium. Most commonly share option agreements are not correctly set up, dividends payments aren’t tax efficient, and individuals haven’t taken personal tax advice ✅ Ensure you have shareholder alignment on an exit, and all key staff benefit from tax relief. It will enable more time to focus on the deal and buyer conversations, rather than worrying about what will come up during the process. ✅ Spread the workload for due diligence and sale preparation at least six months ahead of the sale. Obvious to say, but it happens very often. ✅ Make sure the business doesn’t suffer as a result of the process. Those costs won’t impact your valuation, so they are worth investing in.
Expect to pay for additional finance/accounting support, an M&A advisor and a good lawyer - they will reduce the burden and increase the chance of a successful outcome. It is hard to prepare mentally, but having the business ready for sale is always helpful. It is easy to underestimate the amount of work and emotional energy the sale process puts on agency owners. These should be prioritised depending on where the most value is derived, and integration shouldn’t be forced unless it creates significant value for both businesses.Ĥ) 😵IT WILL BE A HUGE DISTRACTION FROM RUNNING THE BUSINESS There are practical integration planning workstreams around processes, technology and people & culture. 🏅Proposition - can the two businesses create a compelling proposition together? How is that exploited for the benefit of clients as soon as possible? 🎗️Culture - how do the culture of the two businesses align/differ? How is that managed? No one wants an exodus of staff after the deal
🧪Chemistry - do the teams work well together? If they don’t through initial conversations, the deal won’t create the desired outcomes 🔮Vision - is the vision of the senior management on both sides aligned over 3-5 years? Key areas to validate the success of the deal: In order to be comfortable that you and your team will have a positive experience and best chance of success, it is important to make time to work this through with the buyer. It is surprising how often there is no integration plan produced ahead of the deal completing, and frequently no formal planning takes place post acquisition. “Planning is the exception, not the rule, and a large number of acquisitions fail because companies do not plan integration as part of the deal.”
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