Renate Mueller explains the process when dealing with vendor clients
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Narrator: Trying to sell or purchase a business can be a difficult, cumbersome and often complex process. In the first of a short series on the merger and acquisition industry, host Renate Mueller, the President of Renate M. Mueller Consultants Inc., breaks down the steps and tells us how she simplifies the process when she takes on a vendor as a client.
Renate Mueller: Here’s a client who would contact us as a vendor. We would start the process by discussing, basically, the general background, the infrastructure, the shareholding and so on. Our client would then sign a vendor’s agreement with my company, and that vendor’s agreement lays out the terms, so it’s a contractual agreement.
We then would gather all the necessary information. It’s a complete list that I have for the various clients in different provinces of what needs to be assembled in order to put together an evaluation to determine the value of the business. And this is generally a range. It is never a fixed sum that you come up with; it would be a range.
So once we have that evaluation done of what the range would probably look like for the marketplace, we ask our client to set their asking price, because if they are the vendor it is up to them and the owners to determine the asking price they would like to achieve.
We then go to the next step where we package a confidential offering package that is available to be put into the marketplace to only qualified buyers. And we seek out the qualified purchasers, and once we’ve qualified them, that yes, they are interested, with various criteria that we look at, we would then get them to sign a confidentiality agreement because we will not release anything until the confidentiality agreement is signed by all parties. The marketplace does not know that our client is selling. This is all behind closed doors so-to-speak.
We then work with these purchasers in getting additional information for them. And each purchaser has very specific requests that are unique to them in addition to the package that we have already put together.
We then look at the offers. Some will want to present offers. We’ve seen them present verbal offers. Others want to come in with a one page offer, and some want to come in with a twelve page written offer. We will review these offers and then go back to our client to discuss the situation with the offers being presented either verbally or seriously in writing. And then we will go back to the respective purchasers, either to re-negotiate the offer or let them know they are not actually being considered anymore; or we will present counter-offers. At some point when this is going back and forth with the various parties, we will then end up with a solid, written offer, which our client will either accept, reject or counter, and ultimately come to a final purchaser with their letter of interest or expression of interest written out. And that purchaser, of course, will be dealt with by the lawyers of our clients and the accountants and the advisors that they have as well behind their scenes.
It will then be moved forward to a particular closing date and we may assist in some due diligence work that is required to get the deal done by the closing date. So that’s the general process of our services.
If we turn that around the other way, we would do the same thing if we represented a purchaser. However, I want to make it clear we only represent one party at one time. So if they vendor contracts us, that’s our client. If a purchaser contracts us, that’s our client. So it’s very distinct in who we are representing at any given point in time.
Find Renate and Renate M. Mueller Consultants Inc. online: http://renatemueller.ca/
