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

WY Partners offers specialist M&A advice to businesses at the intersection of media and technology who are seeking to sell.

An experienced M&A advisor can maximise the value of a business. However, before appointing a partner, it’s important you understand their typical process to ensure it matches your own approach and ambitions. You’ll also need to ensure you select an advisor you have good chemistry with as you’ll be seeing a lot of each other during the process.

Stage 1

Prepare

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 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 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.

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.

Stage 2

Market

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.

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.

Stage 3

Execute

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.

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 and 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 AND PURCHASE AGREEMENT (SPA)

Work alongside the legal advisors to negotiate on the key value drivers and terminology within the Sale and 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. SALES AND PURCHASE AGREEMENT (SPA)

A sales and purchase agreement (SPA) is a binding legal contract between two parties that obligates a transaction between a buyer and a seller.

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. SALES AND PURCHASE AGREEMENT (SPA)

A sales and purchase agreement (SPA) is a binding legal contract between two parties that obligates a transaction between a buyer and a seller.

INDICATIVE TIMETABLE

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.

BRIAN BOWMAN

Chief Executive Officer

Consumer Acquisition

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