After the Selling Mandate signature, the following steps are implemented:
1) Data Collection
The first step in preparation of a company sale is to collect information focusing on the elaboration of the documents Teaser, Infomemo and Valuation. Such data is also supportive to provide understanding if strategic context and the preparation of a first draft of the document for market prospection. At this moment, corrective actions required for a future process of due diligence are also reported.
2) Approval of Teaser and Valuation
Teaser: is a one-two pages document which summarizes the main characteristics of the business and industry opportunities, yet without disclosing the company name. It has the objective of capturing interest of potential players into the negotiation process.
Valuation: is a document with an economic-financial analysis of the company which results in the determination of the theoretical value of the company through financial models. It is aimed to be used by our clients as an internal reference for comparison against commercial offers coming from the negotiation process.
3) Approval of Infomemo and Target Companies
Infomemo: a 20-30 pages document containing a company summary with a description of strategic positioning, structure, product portfolio, clients, competitive advantages and future perspectives. Based on this document, and after NDA signatures, MAIAS Partners proceeds with meetings with interested players and collects questions for further clarifications.
Analysis of Target-companies: estudo de Empresas-alvo. São várias as possibilidades de segmentos que podem se interessar na aquisição de uma empresa. Podemos classificá-las entre estratégicos e capitalistas:
i. Strategic: are companies with their core businesses in the same industry and interested in acquisitions in order to increase their competitiveness in the market. For instance, they may look for larger market shares, complementary product portfolios or distribution channels/sales, access to technologies or clients, among other factors.
ii. Capitalists: these are players interested on the financial returns deriving from operational profits and/or profits from an exiting transaction in the medium/long term. Private Equity, Venture Capital and Business Angels give shape this group of capitalists, with different profiles depending on the size and nature of the investments involved
MAIAS Partners always submits this analysis of target-companies to customer approval and align transaction expectations according to the profile of each segment.
4) Active Market Screening and NDA Signatures
A MAIAS Partners leverages from its extensive network of relationships to confidentially approach target-companies in order to verify interest.
NDA: the “Non-Disclosure Agreement” is a document signed in order to protect our customers interests. NDA´s are signed withe companies interested to take a further step in the evaluation of the investment prospect.
5) Negotiations and MOU Signature
The evolution of negotiations leads to preliminary proposals and, for the selected company (or companies, depending on specific conditions), takes the process towards a MOU signature.
MOU: the “Memorandum of Understanding” is a document which formalizes the acquisition intention by a candidate, describing the deal conditions to be verified during the due diligence. A Letter of Intent can be used with the same objective.
6) Due Diligence
The “Due Diligence” is carried on by the buying side of the transaction, being with its own resources or with the support of a specialized auditing company. MAIAS Partners acts to organize and speed up the process as a whole, providing all the support to our customers before, during and after the diligence period.
7) Contract Negotiations
After the diligence, new elements can arise in the transaction (some derived from diligence findings) and which most probablly require new rounds of negotiation. At this moment all the details of the transaction model are drawn, and several shareholding and commercial aspects need to be defined, as well as discussions about guarantees and coverage of future conditions.
8) SPA Signature and Shareholder´s Agreement
The SPA (“ Sales and Purchase Agreement”) and the Shareholder´s Agreement must be carefully written to generate a quality transaction conclusion.
Each step of this macro-process demands time, preparation and specific knowledge.