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Disposals Whether working for a company, a financial institution or an entrepreneur, certain considerations should be addressed before a disposal process is initiated: What is the reason for sale? Is the timing appropriate? What level of advice is required? Who are the potential buyers and what do they want? Do all of the stakeholders in the company have the same objectives? Any disposal process needs to be managed and appropriate advice taken. Convex Capital provides advice on the following: Planning; Documentation; Valuation issues; Finding buyers; Negotiating; and Completing the disposal. Planning Establishing the reasons and the basis of the sale is fundamental to the process. Once the owners have addressed the reasons for the sale and established any fundamental issues that may affect the sale process (e.g. whether there are concerns about the future of employees), then Convex Capital can work to establish the appropriate timing of the sale. This will involve reviewing the operational and financial performance of the company and considering external factors such as the financial position of potential purchasers. Documentation In order to maximise consideration certain documentation will need to be prepared. Each process is different but it is usual to write a sales memorandum that will contain various pieces of information on the operations and financial performance of the company. Convex Capital works with its clients to ensure that any information provided to potential purchasers is presented appropriately. Although the information needs to be accurate the sales memorandum is a marketing tool to increase the appeal of the company to potential purchasers. However, no purchaser will buy a company on the back of the sales memorandum but the information needs to be presented in a way to ensure that as many potential purchasers as possible come to the negotiating table. It is therefore necessary that a company takes advice on how to present itself to potential purchasers. This is a process that the Directors of Convex Capital have conducted many times and therefore know what a potential purchaser is looking for and what will appeal to them. Valuation issues It is important that a potential value of the company is established at the start of the process. This is used as a benchmark for shareholders expectations. Any such valuation needs to be based on how the purchaser will view the company and therefore it is necessary to define what is being sold and on what terms. Convex Capital uses a combination of valuation techniques using the most appropriate for the circumstance. This will involve historic and future cash flows, asset values and comparable valuations derived from similar listed companies and comparable transactions. However, it must be remembered that the only defining value of a company is when the purchaser and seller agree a price. Finding buyers Once Convex Capital has worked with a client to establish the basis for a sale and agreed on how the process will be handled then finding buyers should be a relatively straight forward process. Convex Capital uses its industry knowledge and contacts, plus additional desk top research to ensure that the disposal proposal is distributed to the most appropriate potential purchasers. The process is a team effort with the client who may well have their own views on who the likely purchaser will be. This may include the existing management team, a trade player or a private individual. Whoever the purchaser, Convex Capital ensures that the process is appropriately managed and that only necessary information is released at each stage of negotiations. Negotiating Once initial contact has been made with potential purchasers then negotiations have effectively begun. It may the case that the process is informal with approaches made to only a select view or Convex Capital, in conjunction with the owners, may decide that a more structured ‘auction’ process is required. It is important for the company to be presented in the appropriate manner as different potential purchasers may be more interested in different elements of their potential acquisition. For example, it may be that a potential purchaser is interested primarily in earnings but it may be that they are interested in access to a particular geography or a particular asset. Convex Capital works with the owners to review in detail the position of any potential purchaser and present the opportunity appropriately to ensure that the ideal outcome is attained. As the process develops Convex Capital essentially acts as a sounding board to the owners providing advice on the terms and conditions offered by a potential purchaser. Completing the disposal There is a need in any disposal process to manage other professional advisors. Convex Capital ensures that solicitors, reporting accountants and other corporate finance advisors are quickly brought up to speed to ensure the successful completion of the transaction. It may the case, that even after Heads of Terms have been agreed, that further negotiations are required as information is released to the potential purchaser. This is a critical time in any process and the client will need to be given appropriate advice. It should be remembered that during the whole process the company still has to be run and successfully managed. The worst case scenario is for the performance of a company to deteriorate during the disposal process and for value to be lost. Companies for sale Convex Capital works with a number of shareholders that are looking to realise their investment. Below we have listed our most recent opportunities. For more information, or to register details of your own company, please contact info@convex-capital.com and a member of the Convex Capital team will call to discuss.

Disposals

Whether working for a company, a financial institution or an entrepreneur, certain considerations should be addressed before a disposal process is initiated:

What is the reason for sale?
Is the timing appropriate?
What level of advice is required?
Who are the potential buyers and what do they want?
Do all of the stakeholders in the company have the same objectives?

Any disposal process needs to be managed and appropriate advice taken. Convex Capital provides advice on the following:

Planning;
Documentation;
Valuation issues;
Finding buyers;
Negotiating; and
Completing the disposal.

Planning

Establishing the reasons and the basis of the sale is fundamental to the process.

Once the owners have addressed the reasons for the sale and established any fundamental issues that may affect the sale process (e.g. whether there are concerns about the future of employees), then Convex Capital can work to establish the appropriate timing of the sale. This will involve reviewing the operational and financial performance of the company and considering external factors such as the financial position of potential purchasers.

Documentation

In order to maximise consideration certain documentation will need to be prepared. Each process is different but it is usual to write a sales memorandum that will contain various pieces of information on the operations and financial performance of the company.

Convex Capital works with its clients to ensure that any information provided to potential purchasers is presented appropriately. Although the information needs to be accurate the sales memorandum is a marketing tool to increase the appeal of the company to potential purchasers.

However, no purchaser will buy a company on the back of the sales memorandum but the information needs to be presented in a way to ensure that as many potential purchasers as possible come to the negotiating table. It is therefore necessary that a company takes advice on how to present itself to potential purchasers. This is a process that the Directors of Convex Capital have conducted many times and therefore know what a potential purchaser is looking for and what will appeal to them.

Valuation issues

It is important that a potential value of the company is established at the start of the process. This is used as a benchmark for shareholders expectations. Any such valuation needs to be based on how the purchaser will view the company and therefore it is necessary to define what is being sold and on what terms.

Convex Capital uses a combination of valuation techniques using the most appropriate for the circumstance. This will involve historic and future cash flows, asset values and comparable valuations derived from similar listed companies and comparable transactions.

However, it must be remembered that the only defining value of a company is when the purchaser and seller agree a price.

Finding buyers

Once Convex Capital has worked with a client to establish the basis for a sale and agreed on how the process will be handled then finding buyers should be a relatively straight forward process.

Convex Capital uses its industry knowledge and contacts, plus additional desk top research to ensure that the disposal proposal is distributed to the most appropriate potential purchasers.

The process is a team effort with the client who may well have their own views on who the likely purchaser will be. This may include the existing management team, a trade player or a private individual. Whoever the purchaser, Convex Capital ensures that the process is appropriately managed and that only necessary information is released at each stage of negotiations.

Negotiating

Once initial contact has been made with potential purchasers then negotiations have effectively begun. It may the case that the process is informal with approaches made to only a select view or Convex Capital, in conjunction with the owners, may decide that a more structured ‘auction’ process is required.

It is important for the company to be presented in the appropriate manner as different potential purchasers may be more interested in different elements of their potential acquisition. For example, it may be that a potential purchaser is interested primarily in earnings but it may be that they are interested in access to a particular geography or a particular asset.

Convex Capital works with the owners to review in detail the position of any potential purchaser and present the opportunity appropriately to ensure that the ideal outcome is attained.

As the process develops Convex Capital essentially acts as a sounding board to the owners providing advice on the terms and conditions offered by a potential purchaser.

Completing the disposal

There is a need in any disposal process to manage other professional advisors. Convex Capital ensures that solicitors, reporting accountants and other corporate finance advisors are quickly brought up to speed to ensure the successful completion of the transaction.

It may the case, that even after Heads of Terms have been agreed, that further negotiations are required as information is released to the potential purchaser. This is a critical time in any process and the client will need to be given appropriate advice.

It should be remembered that during the whole process the company still has to be run and successfully managed. The worst case scenario is for the performance of a company to deteriorate during the disposal process and for value to be lost.

Companies for sale

Convex Capital works with a number of shareholders that are looking to realise their investment. Below we have listed our most recent opportunities. For more information, or to register details of your own company, please contact info@convex-capital.com and a member of the Convex Capital team will call to discuss.