Even if you know your company inside and out, navigating the intricacies of a business-level transaction requires a unique blend of expertise, time, and M&A strategy.
An M&A partner with a proven process is essential for generating favorable terms.
At Walden, our M&A strategy and process includes four phases:
- Planning
- Search
- Deal Making
- Closing
Each phase includes its own challenges that can impact the selling process, and we’ll demonstrate how the Walden team navigates these obstacles and guides clients through successful transactions in real-world case studies.
Planning
At Walden, we start by thoroughly examining your company’s details, including financial history, existing assets, and positioning for future growth. This evaluation sets up our ability to market your business and engage qualified buyers in confidential markets.
Challenges during the planning phase of a sale can include accommodating the visions of multiple owners, who may have different motivations for selling and post-transaction plans.
How Planning Impacts M&A Strategy
Walden played a crucial role in facilitating the sale of a manufacturing company owned by two partners. The active owner sought to transition to a new role in business development, while the silent partner aimed to exit the business with a significant return.
By conducting a thorough valuation, identifying potential buyers, and negotiating favorable terms, we satisfied the needs of both owners and maximized the value of the business.
Key Takeaway:
“During the planning phase, we helped the company organize its accounting information to leave no doubt the company was thriving and growing. It would allow us to maximize the purchase price.”
— Dean McDonald, Walden Principal
Learn More: Selling a Company with a Co-Owner
Search
When planning is complete, we leverage a vast network of national and international databases to connect your business with the buyers or investors who meet your criteria for a sale, maximizing your company’s exposure and increasing the chances of success.
During this phase, our team provides potential buyers with the necessary details while maintaining strict confidentiality. Walden safeguards your company’s sensitive information by securing confidentiality agreements with qualified buyers as a prerequisite for negotiation.
How Does Effective Search Impact M&A Transactions?
The owner of a Georgia-based automotive repair facility was ready to sell his shop and retire. Deals for service-based businesses like auto repair shops can be complex, and access to databases with the right qualified buyers is crucial.
After reviewing multiple private equity-backed offers, the seller accepted a proposal from a buyer who was looking to expand operations in the Southeast. The buyer was also excited to retain the facility’s existing staff, which was one of the seller’s preconditions for the transaction.
Key Takeaway:
“Most buyers do not want to replace the employees — they want to keep the employees that are in the business when they buy it. Part of what they’re buying is employee retention … That was one of the items that really made this business attractive to that particular company, and that’s true of other companies as well.”
— Dean McDonald, Walden Principal
Learn More: Selling a Professional Services Business
Deal Making
Once potential buyers express interest, Walden facilitates introductions and guides you through the negotiation process to ensure your interests are protected.
The due diligence phase involves initial buyer-seller meetings as well as site visits, evaluating interest, negotiating terms, structuring the deal, and finalizing the Letter of Intent. Walden carefully manages each stage to maximize your return and minimize potential risks.
Deal Making In Action
The owner of a metal fabrication business was ready to retire and engaged Walden to facilitate the company’s sale.
We had already worked with the buyer on a previous transaction a few years prior, and the Walden team assisted the owner by conducting a financial audit and identifying potential buyers before navigating complex negotiations and due diligence.
We arranged weekly calls between the buyer and seller during due diligence to keep the process on track and ensure documents were being exchanged in a timely manner.
Key Takeaway:
“Due diligence is always going to be painful for the seller. Every aspect of the business will be scrutinized … I liken it to someone opening your lingerie drawer and going through it because that’s how invasive it can feel.”
— Sara Burden, Walden Principal
Learn More: Selling a Metal Fabrication Business
Closing
Closing an M&A transaction requires meticulous attention to detail and strong negotiation skills. Walden’s experienced team handles the intricacies of the sale agreement, ensuring a seamless transition of ownership.
During the post-sale transition period, Walden provides guidance and support to the seller, assisting with the transfer of knowledge and relationships. By navigating the complexities of the closing process and facilitating a smooth handover, Walden helps ensure a successful outcome for all parties involved.
Focused on the Finish Line
The owner of a successful flag and flagpole manufacturer sought to sell the business and retire. Walden facilitated the transaction by identifying a suitable buyer.
The closing phase presented challenges, including unexpected delays and perceived discrepancies in financial records. The Walden team successfully navigated these obstacles through careful planning, effective communication, and a persistent focus on completing the deal.
Key Takeaway:
“Our perspective was, ‘Let’s not panic. We get through these problems all the time. Let’s just work our way through it.’ And we encouraged the buyer not to walk away from a perfectly good business … We prevailed because we had calm heads and kept everybody focused on working together to complete the transaction.”
— John Phillips, Walden President
Why Choose Walden?
As our case studies demonstrate, Walden’s proven record of success is based on a wealth of experience. Our principals have successfully completed deals throughout various industries, including manufacturing, distribution, and business services.
We recognize that every business is unique, and we leverage our extensive network of industry experts, financial advisors, and legal professionals to provide comprehensive support. Most importantly, the Walden team always puts your specific needs and goals at the forefront of our strategy.
An M&A strategy is strongly recommended to make your sale process as smooth and successful as possible. Contact the team at Walden today to see how we can help you with your transaction.
