M&A Services
A sell-side mandate is one of the more common situations for retaining Arthur Nordlie & Company advisors in which the firm takes full project management responsibility for the whole divestiture process. The sell-side projects can be described as going through four phases.
- Preparations.
- Buyer contact.
- Due dilligence.
- Negotiations leading to signing and closing of transaction.
The process itself is a critical and often underestimated value driver. In our view, the combination of professional process management and the creation of competitive tension in the process will deliver maximum value potential to the sellers. In general terms a divestiture process is usually hadled in one or two basic forms:
Controlled auction: a confidential process where 4-30 potential buyers are contacted and the inital information is conducted via written material, e.g. an information memorandum. After an indication of interest, access to management presentation and further due dilligence is provided to a limited number of selected parties.
Negotiated process: one or few buyers that are regarded to be the best suited for a transaction are contacted for a confidential process; sometimes a dialogue may already be initiated. Information distribution is handled more directly e.g. through mangement presentations. Negotiations and price indications are requested early along with confirmatory due dilligence.
There are plenty of variations of these two basic forms as well as process strategies are tailored individually to the situation and the clients’s wishes. Furthermore, mergers and joint ventures are special situations that require us to work closely with both parties during the whole process.
Key process parameters when deciding on the process strategy are the sellers’s view to the most attractive transaction outcome and structure, the number of potential buyers, knowledge and rationale of the most suitable buyer as well as degree of information distribution.
In our experience success of a sell-side mandate is achieved through hard work, strong project management, continious reporting and dialogue as well as clear areas of responsibility. Arthur Nordlie & Company advisors always work in close cooperation with owners, board of directors and mangement team as well as other advisors.