M&A Process

Agile Equity’s

M&A Process

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We help our clients design an optimal liquidity strategy by carefully assessing client-specific and current market factors.

Sell-Side Strategies Workflow

Sell-Side Strategies

Preemptive

Description

  • Identify and Screen the most likely buyer universe which often includes both strategic and equity sponsors

Number of Buyers

  • 1

Advantages

  • Efforts focused on one buyer
  • Maximum confidentiality

Disadvantages

  • Unlikely to maximize value
  • Tied to result of one negotiation which is risky
  • High Risk with low probability of close

Considerations

  • Have very clear sense of most logical buyer
  • High risk of damage from business disruption

Targeted Solicitation

Description

  • High-level approach to selected potential buyers
  • Customized Offering Memorandum

Number of Buyers

  • 2-10

Advantages

  • Sense of competition enabled
  • Avoids perception that  property is being shopped
  • Deep industry expertise and knowledge of the market is invaluable

Disadvantages

  • Requires top-level management time commitment
  • Often maximizes shareholder value

Considerations

  • Have limited group of logical buyers
  • Have key objectives of confidentiality and limiting any business disruption

Controlled Auction

Description

  • Limited range of logical potential buyers contacted
  • Requires formal guidelines on sale process and timeline

Number of Buyers

  • 10-25

Advantages

  • High degree of control over process, with multiple rounds of offers
  • Creates strong sense of competition
  • Maximizes shareholder value

Disadvantages

  • Limited confidentiality
  • Potential for disruption due to rumors

Considerations

  • Seek good balance between confidentiality and value
  • Leave no money on the table and extract maximum value

Public Auction

Description

  • Public disclosure made
  • Preliminary materials distributed to wide range of potential buyers

Number of Buyers

  • 25+

Advantages

  • Most likely to obtain highest offer
  • Finds hidden buyers and Agile expands to International buyers

Disadvantages

  • Risk of business disruption but avoidable with third party advisors

Considerations

  • Believe business is unlikely to be damaged by public process and focus on maximizing shareholder value

M&A Workflow and Timeline

Best Practice Approach from twenty years of experience and 210+ completed transactions.

Initial Groundwork

Planning

  • Identify the universe of potential acquirers
  • Strategic acquirers and private equity (PE) sponsors

Preparation

  • Compile all due diligence, develop and finalize long-term strategy
  • Establish an online virtual data room (VDR) and all documentation

Positioning

  • Highlight unique and distinguishable platform characteristics
  • Build the business case and strategic rationale for each buyer

Packaging

  • Strong Offering Memorandum, Teaser and Management Presentation
  • Go to market with Quality of Earnings Report to insure accurate financial reporting that confirms revenue and EBITDA

Execution

Weeks 1–4
PHASE 1

Kick-off & Preparation

  • Define objectives and marketing strategy
  • Conduct operational, financial and legal due diligence
  • Develop preliminary valuation
  • Develop positioning and marketing thesis
  • Meet attorneys, accountants and other company consultants
  • Set process timeline

Weeks 3–5
PHASE 2

Marketing Materials

  • Define key selling points
  • Prepare descriptive memorandum & other key marketing materials (e.g.
  • management presentation)
  • Identify potential investors (tiers I, II and III)
  • Finalize contact strategy for each type of investor

Weeks 5–9
PHASE 2a

Marketing

  • Contact buyer universe and describe points of uniqueness of the business
  • Provide Offering Memorandum and Management Presentation
  • Provide buyers with bid letter for Indication of Interest

Weeks 9–17
PHASE 4

Investor Due Diligence

  • Shortlist investors based on various criteria
  • Invite short-listed investors for due diligence visits
  • Management delivers presentation
  • Distribute contracts for markups
  • Request final binding bids

Weeks 17–20
PHASE 5

Finalize Bids, Negotiations & Closing

  • Negotiate final offers
  • Finalize contracts with markups
  • Public announcement
  • Pursue HSR and any other required filings/approvals to closing
  • Close transaction