A Sale on the Horizon?

Preparing to sell a business? We have identified the situations that represent ideal times for you to consider exiting your business.

Every Successful Relationship Starts With a Conversation

Moving on to other projects or retiring

The classic reasons to sell, it may just be that time for you. It’s important to not wait until the business stagnates or is in decline. Planning for retirement or moving on never starts too early, and once you decide to go ahead, it always takes longer than you anticipated.
Joining a larger organization to get your company to the next level
You may have a product line that could do well in an overseas market, or a new technology that could generate significant sales in a new vertical, but you don’t have the financial resources, the brand recognition, the boots-on-the-ground capabilities to enter a new geography, and so on.

Capitalizing on favourable M&A dynamics in your industry

You may observe that deal-making is starting to heat up in your industry, with strategics and private equity showing unusual interest in acquiring market share, new technologies, talent, etc. Prices tend to rise in these circumstances, and you may consider an exit during these auspicious times.

De-risking: share some of the risk with new ownership

It may be time to consider selling a majority stake in your business to a buyer who can participate in and even lead the growth of the business, with your continued support, allowing you to “take some chips off the table”, and diversify your assets for you and your family.

Addressing an unsolicited offer from a potential buyer

You have received interest from one or even a few buyers. Buyers try to move in on targets on their own, as to avoid an auction in which they’d have to compete. Addressing that offer on your own carries a significant risk of leaving dollars on the table.

Exit your business with confidence.

It’s too large an undertaking to do it alone. At stake is the largest store of your net worth, and likely the one you care about the most. No one performs heart surgery on themselves; they go to a cardiac surgeon. Same with your business.

The best way to sell is to stay focused on running your business (and cementing its value) while letting deal professionals run the process.

What to Expect When Working with Loxley Capital

We have refined a bespoke process specifically built for private, owner-operated businesses in Canada. You will navigate the pitfalls of an exit to private equity firms, your own management team or strategic players, and conclude a transaction at a compelling value and terms. Our approach is structured, technology-driven, outcomes-driven, yet customized, creative and transparent.

(1) Get Ready

We review your corporate and personal position (as a shareholder) from all angles (strategic, tax, accounting, reporting, legal, financial, operations, human resources, leadership, etc.) and recommend changes that will improve your attractiveness to potential buyers. We also prepare you emotionally, as selling a company can be a wild ride.

(2) Develop deal collateral

We prepare a “no-names” one-page teaser that provides a powerful snapshot of the business. We also develop a comprehensive Confidential Information Memorandum (CIM) that covers all aspects of the business. It highlights the positive features of the business and addresses the troublesome ones, earning the trust of potential buyers and setting an honest and productive tone for the negotiations that follow.

(3) Identify prospective buyers

Our analysts sift through our proprietary database of 0f strategic and financial buyers. We also search limited-access M&A marketplaces, connect with buy-side advisors in our network, cross-check with recent buy-side mandates we track, and catalogue relevant industry participants. Prospective buyers are grouped into tiers in order to prioritize our outreach efforts. Every potential buyer we identify is reviewed and approved by you before contact is initiated.

(4) Build or reinforce connections

Dedicated specialists on our deal team reach out to decision makers at the identified prospects and deliver a compelling “deal brief”. On average, these specialists will make approximately 90 connections per week. Our specialists leverage our proprietary deal-management software platform, built on Pipedrive, to facilitate quality connections and continued follow-ups.

(5) Create an auction environment

All buyers who show interest are required to sign an NDA in order to know the name of the company, receive the CIM and to ask questions. After shepherding the most interested buyers in the right direction, we set a deadline for offer submissions, which creates a competitive environment. We then review all offers with respect to price, fit, terms, and conditions, and pit the proposals against each other to negotiate the most favourable Letter of Intent (LOI).

(6) Conduct due diligence

After the seller signs the preferred LOI, the parties typically enter into an exclusivity period where the buyer is granted access to a secure Virtual Data Room (VDR) we host. We actively manage a buyer’s due diligence process and curate communication between all stakeholders to ensure nothing jeopardizes the deal. This VDR allows for realtime tracking, user management, and security controls.

(7) Finalize purchase agreement

With due diligence moving along, our deal team leads and negotiates the definitive agreements, with support from legal counsel, tax specialists and accountants. We comb through every clause, while keeping all parties focused on the big picture—it’s too easy for experts to not see the forest for the trees.

(8) Close the sale

There are so many ways a deal can fail, and nearly every deal will die at least once. We are unfazed: we hustle and never quit until we reach a satisfactory outcome for our client. Only then is our job done.

Every Successful Relationship Starts with a Conversation.

Start exploring your options today with one of our deal-makers.