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What is involved?

There is always more involved in a successful transaction than most people believe. It is not that any one aspect is hugely complex or difficult to understand, it is just the sheer volume of processes, documents, communication, reassurance and risk management needed to pull off a deal, means that continuing to run the business and simultaneously delivering a successful deal become very difficult.

There is no such thing as a typical deal, however, the following are involved in every transaction, and of course some run concurrently, whilst others are dependent upon the outcome of a previous step.

Identification that an opportunity exists and initial consent from the Vendor

This can be easily done if the vendor gives the right signals in terms of putting the business on the market. It can be a challenge - to ward off competitive trade buyers and in the case of MBOs to avoid a conflict of interest between your existing responsibilities and your future opportunity. Discretion, independence and confidentiality are a must at this early stage.

In a potential MBO situation, disclosing confidential information about the company is prohibited under Company Law and you need to be careful not to compromise your position if there is not a willing vendor or not a transaction to be done.

The team should work in consultation with their financial advisors to identify if the current owners would accept an approach from a potential acquiror and the most appropriate means of approach. Get us involved as soon as possible.

Preliminary evaluation of your business plan and valuation of the business

It is essential to get an independent expert eye cast over your proposals at the earliest stage - spot the potential deal stoppers early and work them out of the process. You need to know whether a deal is possible - both in terms of the expectations of the seller and the ability to finance the proposed deal. This includes an initial view on financial structuring.

Vendor negotiations

We help lead these discussions - although it is essential to establish and reaffirm the trust between you and the vendor. Clear, plain English terms, subject to contract, need to be agreed between the parties. This is critical. When other advisors get involved in the deal, they can refer to this upfront agreement and complete their role, and hopefully not get involved in re-negotiating the deal.

Targeting and delivering financial backers (banks and equity investors)

Depending on your personal cash or savings situation, it is possible that both debt and equity capital need to be raised. We will guide you and introduce you to the necessary people - not salespeople, but the decision makers who decide if they want to back a deal or not - so you quickly get a clear message. This includes investor presentations and meetings, until you select who you want to partner with on your deal. Our strong relationships with these decision makers avoids your time being wasted.

Due diligence (financial, commercial, legal and management)

Depending on the complexity, size and risk in your deal, some or all of the different types of due diligence will be carried out by third party professionals. This is your opportunity to check and then to double check that you know what you are buying, and to give you confidence that your plan will work and you have enough cash headroom to cover all scenarios.

Project management to completion

The deal process is a roller coaster ride, and there are significant legal, banking and commercial steps that are necessary in order to manage the deal to completion.

Bob Hollis: 0117 973 9373      Patrick Gore: 02920 757 047

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