If you intend to sell your company (exit), start planning well in advance. The overall planning should include strategic and tactical activities to create value, make hidden values transparent, and — last but not least — be able to address potential problems that may reduce the value of the company.
These overall preparation activities take time and must be started 2-3 years before the intended exit date. Examples of activities are:
- Streamlining of the business.
- Sale of real estate.
- Addition or replacement of key employees or board.
- Closure of ongoing legal disputes where the risks are difficult to assess.
- Incorporation of product lines.
- … etc.
Detailed annual plan
The exit process, with a detailed plan of the project, should start about a year before the intended sale. The plan includes activities such as:
- Selection of advisors (M&A, legal, commercial),
- VDD (seller’s due diligence),
- Selecting, contacting and teasing potential buyers,
- Company description, the Investment Memorandum (IM)
- Structured bidding rounds (non-binding, binding bids).
- Employment agreements, incentive programs, pensions,
- Management presentations to buyers
- Negotiations, and an
- Agreement (the SPA).