Services

Sell-Side

Farrell Advisory provides fully vetted and compelling financial and operational data to support the sale of an improved business or for raising new capital. This approach leads to higher price and certainty (i.e., time to completion and terms) of M&A success with increased competition from knowledgeable bidders. In addition, the better the seller can improve on the buyers financing opportunities and the company’s story, the smoother the sale should be.

Preparing a Business for Sale or Third-Party Investment – Pre-Sale Diagnostics

Farrell Advisory provides a disciplined and fast-paced project management approach to assessing and preparing a company for sale and keeping a relentless focus on results and the key value drivers via a dynamic valuation model behind a potential transaction while still allowing management to run their business. A successful sale depends on maintaining Credibility and Control.

Get the house in order in terms of organization structure, growth strategy, new business development, operational performance, executive and staff development, solution/product development, contractual documenation, protecting IP, and back office (e.g., HR, IT, reporting, accounting and procedures manual, tax and compliance issues, audits). Perform pre-sale checkup followed by corrective actions. Keep the business running.

Identify owner objectives. Develop divestiture, contingency and communication plans. Address strategic and tactical priorities, resources and timing. Assemble, motivate and brief selective members of the management team. Assemble a team of trusted advisors and deal specialists. Appoint senior project manager. Ensure internal managers and external advisors communicate the same message.

Self-review enables seller to maintain credibility and control and better anticipate buyers needs. Perform quality of earnings and working capital analysis. Highlight key performance indicators and management tools and demonstrate their relevance. Collate scrutinized data in a well-thought out and structured centralized database; with some data being released in phases. Unpleasant surprises derails transactions and deflates value.

Develop sound financial projections. Articulate market assessment, opportunities and value drivers to support future growth and profitability.

Understand non-financial aspects (e.g., the business, management team and talent, compensation package, severances, long-term contract, change of ownership clauses, synergies, product/service offering, market and Platform vs. Add-on acquisition) from a buyer’s perspective. Build strong concise knowledgeable messages around quality of earnings and buyer’s skepticism and findings.

Evaluate valuation, structuring alternatives and related trade-offs. Understand potential deal breakers and price adjustment issues. Implement staff retention and long-term incentive plans. Protect business value via performance improvement initiatives, succession planning, insurances coverage and company and personal tax and financial planning. Identify likely buyers.

Pre-Sale Diagnostics and Sell-Side Due Diligence – Higher Valuation and Higher Certainty

Background

  • As strategic and financial buyers are under greater scrutiny to make the right investment, the rigors of due diligence have increased tremendously.

Advance Preparation and Formulation of Sales Strategy

  • Assess the company’s readiness to maximize its potential sales value.
  • Identify possible improvement areas that can help increase the potential sales value given various time horizons.
  • Advise the company on its sales strategy and plan, including the selection of advisors.
  • Stage the company for sale or investment.

Sell-Side Due Diligence

  • Prepare an independent due diligence report on the business (scope is no different than buy-side due diligence). The report is provided to potential purchasers on a no-reliance basis.

Transaction

  • Project Management including appointing & assessing other professional advisors.
  • Managing a secured online data room with validated data to help facilitate the flow of deal centric documents and communications with buyers and other advisors.
  • Assist with the negotiation of provisions in the Letter of Intent and Purchase and Sale Agreement (e.g., warranties and indemnities, and working capital and earn-out targets).

Key Benefits

  • Understand the valuation of the business and what can be done to improve the valuation (“Dynamic Valuation”).
  • Provide advice with regards to the optimal transaction structure for financial planning and tax purposes.
  • Present the company in the most favorable light.
  • Address critical issues before they ever rise to the level of being an impediment to the transaction or a destruction to the value of the business.
  • Anticipate buyers needs (and what they will need post-closing).
  • Enhanced credibility and transparency of financial and business information to ensure buyer bases offer on key and reliable information.
  • Increase the number of bidders and reduce re-trade opportunities (more certainty with offer)
  • Better prepared Management team for presenting business.
  • Seller better able to manage and guide and communicate the transaction at the appropriate time and speed.
  • Minimizes disruption to the Business and its Management and reduces on-site work by multiple parties.
  • Provides additional certainty over financing, particularly for private equity buyers.
  • Maximize net proceeds, reduce the time to closing and reduce risk of loss in business value during the transaction process.

Lynx

Sale of UK pension software business

Lynx

Sale of Lynx group plc, listed on UK stock market, to Skandia ($500M of revenue)

Lynx

Sale of Lynx Automotive to US listed business

Lynx

Sale of Lynx Ascent technology

Expertise Training

Reverse take-over and raising of $3M equity on UK AIM for a technical IT training business

Service Government Contractor (Confidential)

Financial Advisor for sale of minority shareholding

KeyLogic

Assessment and implementation of improvements and structuring a government contractor for sale

IR Technologies

Assessment, accounting and structuring of transaction for MBO

International Listed Health and Retail Company (Confidential)

Financial Advisor for $50M fund raising

SaraLee

Carve-out & quality of earnings of Branded Apparel divisions ($4.5B revenue)

Sale of Tele-Works

Advisor to Board for sale of electronic billing, payment, and communication services company

Dawsongroup plc

Carve out of Volvo Distributorship representing 50% of business

Delphi

Carve-out & pro-forma cost base & sell-side due diligence ($1.3B revenue, Chapter 11)

BP

Carve-out of Olefins, derivatives and refining group ($25B revenue)

Equipment Government Contractor (Confidential)

Valuation and assessment of company and structuring for sale purposes

Disclaimer Note: Certain transactions listed above were effective by principals of Farrell Advisory prior to the date they joined the firm