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Selecting an experienced M&A advisor to run a sale process will typically drive up the value of a business, particularly where there is competitive tension amongst potential purchasers. Choosing an advisor that can do this and that can work closely alongside Management for an extended period of time will maximise the chance of a successful outcome for all.

Our step-by-step guide to the WY Partners process

Step 1: Strategic insights

Before the process starts, we must prepare the business to be sold. The business must look attractive to buyers and be positioned in a way to attain maximum value.

Key activities in the preparation phase include: a detailed review of financial information, preparation of marketing materials, advising on a potential buyer pool and preparation of a virtual data room. This phase is the underlying foundation to a successful M&A process.

We will:

Review financial information

  • Analyse historical financial information to determine underlying profitability and perform a detailed review of working capital, both of which are key valuation metrics.
  • Leverage WY Partners financial expertise built from working on transactions from both sides of the table to prepare for key negotiations on behalf of the sellers.
  • Provide support for the sellers’ future vision for the business by leading the preparation of a financial model backed by detailed assumptions.

Prepare best-in-class marketing materials

  • Prepare a best-in-class long form marketing document, the Information Memorandum (IM)1, which presents the key attributes of the business and allows potential purchasers to understand the acquisition opportunity.
  • Prepare a management presentation that the sellers will present to potential purchasers to describe the business in their own words. These meetings are likely to be interactive and allows for an in-depth Q&A session.

Identify potential purchasers

  • Perform a detailed review of the market using our deep industry expertise, research, and discussion with the sellers to identify a focused list of potential purchasers across different buyer groups.
  • Agree a shortlist of potential purchasers to target based on the strongest strategic rationale. The key here is to identify those buyers to whom the acquisition would be particularly compelling, for instance, where there is revenue or cost synergy, or where there is a geographic gap.

Prepare the virtual data room

  • Collate key transaction documentation to be stored in a secure and cloud-based virtual data room (VDR)2.

1. Information Memorandum

This confidential document is the primary marketing material that is shared with potential purchasers prior to any management meetings where the business can be presented. It must concisely and clearly articulate the key investment highlights and allow potential purchasers to understand the opportunity prior to gaining any access to Management.

2. Virtual Data Room (VDR)

A virtual data room is an online repository for storing and sharing documents securely. It is used during the due diligence process to review, share and disclose company information.

Step 2: Marketing

Once the preparation phase is complete, we will contact prospective buyers. Each interested party will receive a personal confidential overview of the opportunity from a member of the WY Partners team. Management presentations will then take place between the management team of the sellers and buyers who have been selected to progress to this stage.

The presentation gives the prospective buyer an opportunity to dig deeper as they will meet the individuals at the heart of the business. Thereafter, we work with the sellers to interpret and negotiate indicative offers received and seek to enhance each through the competitive tension of the process. The length of the marketing phase is dependent on the level of interest in the business.

We will:

Make purchaser contact

  • Approach the agreed list of potential purchasers providing an anonymous teaser3 document where required. WY Partners brings deep and long held relationships with key decision makers from buyers and investors across the media and technology landscape. The opportunity and its compelling strategic rationale are discussed directly with each company.
  • Distribute the appropriate marketing materials once a Non-Disclosure Agreement (NDA) has been signed.
  • Engage all interested parties by the terms of the process letter4 to set out the bidding and timetable parameters.

Organise meetings

  • Co-ordinate correspondence, information requests and meetings with potential purchasers.

Present indicative offers and negotiate heads of terms

  • Receive and present all indicative offers to show the relative merits of each one and decide on a purchaser to select as the preferred party.
  • Negotiate and agree heads of terms5 with the preferred party and enter into a period of exclusivity.

3. Teaser

The teaser supplies just enough information to entice the buyer into wanting to know more. It showcases top line information such as the company’s product or services, its unique selling points, industry overview, ownership structure, potential areas of growth, and high-level financials.

4. Process letter

The process letter outlines the basis on which bidders may make an offer.

5. Heads of terms

Heads of terms, also known as a letter of intent (LOI), set out the terms of an acquisition agreed in principle between the parties before the finer details are negotiated. Although heads of terms are usually not legally binding, the document records the future intentions of parties wishing to take part in a transaction but does not enforce obligations on them. The only binding element of the document is typically a fixed period of exclusivity for the potential purchaser to conduct due diligence.

Step 3: Execution

The final stage of the process where, typically, a single party will be selected to progress into exclusivity. Buyers will conduct detailed due diligence on the business, which will include an investigation of the business’ financial, legal and operational history, as well as the market opportunity.

The diligence phase is thorough and will often involve the buyer using their own professional advisors such as accountants, management consultants, technical experts and lawyers.

We will manage the diligence process, using the VDR to feed information to the buyer’s advisors and hold calls to ensure that all questions are answered efficiently. Following due diligence, the buyer and seller will agree on final terms in the Sale or Share Purchase Agreement (SPA) prior to closing.

We will:

Assist with due diligence

  • Co-ordinate and manage due diligence6 providers which can include financial, tax, commercial, legal, HR and technology.
  • Provide access to information through the VDR and arrange meetings with the different diligence providers.

Negotiate the Sale or Share Purchase Agreement (‘SPA’)

  • Work alongside the legal advisors to negotiate on the key value drivers and terminology within the Sale or Share Purchase Agreement (SPA)7 alongside further ancillary documents. These documents are legally binding.

Close the deal

  • Actively manage the process right through to completion to ensure the deal closes successfully.
  • Close and announce transaction.

6. Due diligence

The due diligence process is when all documentation and records are compiled by the seller and provided to the buyer. The findings help the buyer assess their risk and improve the decision-making process.

7. Sale or Share Purchase Agreement (SPA)

A Sale or Share Purchase Agreement (SPA) is a binding legal contract between two parties that obligates a transaction between a buyer and a seller.

Step 4: Post-deal services

After the deal has closed we continue to work with sellers on adjustments to the final purchase price. Our work is generally split into two areas. These are:

Completion accounts

When this price mechanism is used, we help sellers to calculate the final excess cash calculation by agreeing the completion accounts which tends to be 2-3 months after close.

Future consideration

Deals can often be structured to include an element of consideration that's deferred or contingent on future events – an “earn-out” or “deferred consideration”. Buyers will use this mechanism to reward sellers for delivering future growth and lock them into the business for a defined period. The terms and conditions vary from deal to deal and can be linked to financial metrics such as revenue or EBITDA or commercial measures like retention of key clients.

We will help you to understand the technical intricacies and plan for the potential future payments.

Indicitive timetable

Prepare
Market
Execute
Month
1
2
3
4
5
6
Kick off
Information Memorandum
Financials / business plan
Potential purchasers
Dataroom
Management presentation
Purchaser content
Second round
Exclusivity
Completion

Zach van Driel and Adam Turowski

Founders

Miri Growth

WY worked tirelessly in finding the right buyer for Miri Growth. They were highly effective in running a competitive process and were alongside us every step of the way to completion. Their efforts resulted in a great outcome for us as founders, our business and our employees going forward. We highly recommend WY Partners to anyone looking to evaluate their options for the next steps for their business.

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Will Rowe

Chief Operating Officer

Rufus Leonard

WY Partners were fantastic from start to finish. As expert M&A advisors, WY's relentless commitment, from the beginning and throughout the process, brought us great comfort. They provided detailed and professional advice that led to a successful outcome that wouldn't have been possible otherwise. WY were an invaluable partner throughout the sale process, and we highly recommend them.

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Bethany Shiers

Investor

BGF

We were delighted with the support that WY Partners provided throughout the process. The team gave insightful, sector-specific advice, which was invaluable for the financial aspects of the transaction. It was a pleasure to work with WY Partners and we look forward to doing so again in the future.

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Fergus Lawlor

Chief Executive Officer

Purple

We were delighted with the advice and support we received from WY Partners throughout this process. Throughout, they offered valuable and reassuring advice ensuring our interests were represented with professionalism and a personal approach. WY Partners is a company that I would not hesitate in recommending to any business owner about to undertake a similar process.

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Brian Bowman

Chief Executive Officer

Consumer Acquisition

I am thrilled to recommend WY Partners to anyone thinking about selling their company or considering a sell-side advisor. The team helped us navigate complex issues at every stage of the process and at all hours of the day and night. WY Partners is a world-class partner and there is no way this deal would have happened without them, and their steady guidance and support.

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Shumel Lais

Chief Executive Officer

Appsumer

We were delighted with the advice that we received from WY Partners throughout the exit planning and company sale processes. They did everything they promised and worked tirelessly and professionally every step of the way. I found a lot of comfort in the helpful advice and consistent support from the WY team, who always had our best interests in mind. Their deep transaction and industry expertise enabled us to achieve the best outcome for our company.

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Sam Booth

CEO

Just After Midnight

When it came time to begin a process WY worked tirelessly to match our plans for the business with the search for a potential partner. WY Partners identified Ultima as a potential buyer and led the subsequent process; their judgement, investment knowledge, and collaborative approach ensured we made the best decision. They delivered value at every stage and were instrumental in the successful sale of our business. They felt very much part of our internal team throughout, and we would have no hesitation in recommending them to owners considering the sale of their business.

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Richard Jones

CEO

Wayin

Privacy and personalization can only exist in the future with a first- and zero-party data strategy, rather than third-party data that is increasingly incomplete, inaccurate, and breaches consumer trust.
We're thrilled to join Cheetah Digital and continue our mission to facilitate honest, mutually beneficial relationships between brands and consumers.

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