- Estimate of the present market value of the business
- Status of the current market for this type of business
- Suggested near-term steps to enhance selling price of the business
For an individual or a company seeking a business in a particular industry or market, with a specified level of sales or profit, in a given geographical area, The Litchfield Group can provide important added value to their search:
Comprehensive Research – We research and identify the companies that fit the buyer’s search parameters. (Most of these companies will not be actively on the market to be sold.)
Initial Contact – We contact the owners of the companies directly. Often an initial contact by a third party such as ourselves is more effective than when a potential buyer makes that “cold call.”
Qualifying Acquisition Opportunities – We conduct the initial meeting with the business owner to qualify the business for our buyer client’s consideration.
Evaluation – We gather detailed financial, operating and market information on the business.
Meeting Between Buyer and Seller – Only after a potential acquisition has passed the initial analysis and is of interest to our client, do we arrange and participate in a meeting between the buyer and the business owner.
Financing – Where appropriate, we introduce our client to sources of acquisition financing.
Closing the Transaction – Once our client has decided to pursue a particular acquisition candidate, we assist in formulating the offer, conducting the due diligence, and assuring that the process proceeds to a successful closing.
Our process includes the following steps:
Evaluation – We analyze all expenses of the business in detail to assure, for example, that any salaries and personal fringe benefits the owners take that are above normal market rates are added back into stated profits. This assures that the asking price accurately reflects the true profitability of the business. We are usually able to sell the business at or near the asking price we and the owner have agreed upon.
Confidential Information Memorandum (CIM) – Working with information provided by the seller and other general industry sources, we prepare a CIM that:
- Fully describes the business, including financials
- Highlights the main selling points for prospective buyers; and
- Is only made available to qualified, interested buyers who have signed a Non-Disclosure Agreement (NDA)
Marketing the Business – We then communicate this acquisition opportunity, without revealing the name of the company, to our own potential buyer contacts and through various proven channels to reach a wide range of prospective buyers.
Qualifying Buyers – Just as a prospective buyer performs due diligence on a potential acquisition, we evaluate the buyer in terms of financial resources and likelihood of success in managing and growing the company.
Follow-Up with Interested Buyers – We facilitate the buyer’s review of the business, providing additional information as requested, and arranging visits to the business and meetings with the owner as appropriate.
Purchase Offers – We elicit formal offers from buyers who are ready to move forward, and provide advice to the seller in these negotiations.
Getting to the Closing Table – To better assure that a transaction will close, we often:
- Assist buyers to secure financing
- Assist buyers to obtain lease assignments or new leases
- Assist sellers to have all necessary documents and information available for the buyer’s due diligence and to fulfill all closing conditions and requirements; and
- Work with buyer’s and seller’s attorneys to streamline the process of reaching agreement on all closing documents.
Throughout the engagement, we provide weekly reports to our seller clients, detailing who the active buyer prospects are and the current status of each prospect.