M&A Process & Timeline

[Music] now that we've talked about the the opportunities and the alternatives to transfer let's let's take a look a little bit at the length of time it takes to to execute on any of these transitions in general a typical m a process may last anywhere from six to nine months and sometimes up to a year to get done and i know this slide's a bit busy so i'll try to walk through some of the main phases here marking marketing document prep is the first major task to getting a deal up and running this is where we as your advisor would spend a good deal of time to run our own due diligence and work with you to develop a well thought out confidential information presentation or what we call sip so this is where we we try our best to present all facets of the business in a way that might be most meaningful to potential buyers and and then during this time we will be researching and compiling a list of potential buyers that obviously will will run by the seller and make sure everyone's on the same page and then the next the second phase is launching the deal to the marketplace usually we'll start with strategic buyers you know they're not necessarily in the business of reviewing deals so it will likely take them a bit longer to sign ndas and review the marketing materials then we put financial buyers in the mix maybe a week or so later as they're pretty quick at working through and reviewing materials so basically through this segment it would lead us into getting our first indications of interest and then later a letter of intent or loi which is a written document that like outlines the intentions of both the buyer and the seller during a transaction and so we'll essentially use this as kind of a road map that transaction so best case in a good m a process you may get several lois that you can negotiate to try to find the best of each while trying to ultimately narrow it down to perhaps the best ball and then you might pick the buyer who can agree with the best of all and move forward with them so once an loi is signed the buyer goes through their due diligence process and this is certainly where preparation is going to come into play a good advisor will take steps and make sure that you have proper documentation put together and it's well organized in what we call a data room and then towards the end of diligence and moving closer to uh closing is where the purchase agreement comes into play and and the purchase agreement is the actual legal document that gets negotiated so we as your advisor will work with you and your attorney in making sure that the terms that were agreed to in the loi phase are being captured in the actual agreement and that gets closed on and then obviously from there you get your proceeds macy quick question on this timeline one of the questions that we had early on in our presentation was the ability to transfer the alternative so go from mbo to esop or maybe you want to go from esop to the m a route or maybe it's the m a route back to the esop when you're looking at this timeline uh is it your opinion that that you can do that or are you excluded from transitioning between alternatives at any point no it actually in this timeline what tom's explaining that that kind of analysis is something that you'd probably want to consider first we are prairie often times when a buyer is trying to decide what perhaps is the best road for them uh we might present to them something that's called an alternative analysis which kind of outlines the different roads you know what that might mean the whole process and maybe what it means at closing and so i would say in general uh to answer your question that would probably happen very initially before before you choose anything probably before you get down this road not to say that you know you can't back out you know maybe the buyer universe isn't as robust as as you might have initially thought and perhaps an esop might be a better route um but obviously all these things take time and so doing that alternative alternatives analysis beginning is certainly a very important piece uh to your decision making and we have had events where we looked at both esop and m a side by side up to the loi or the ioi phase it doesn't happen all too often but you may want to see look i really like the esop idea but i have to look and see what's out there in the marketplace it's i feel like it's my duty to do that to protect our shareholders and so you may ask to do a very limited marketing process and we just really test the market to see how much interest there is in the m a world but as macy indicated early on in the process you should have enough information to go down down one road or the other but it doesn't preclude you from switching gears at some point the longer you go the more costly it gets if you haven't made your decision [Music]