The Valuation

Since acquisitions are viewed by acquirers as investment opportunities, the future potential of the company takes precedence over its past performance. Financial forecasts that can be supported need to be developed to demonstrate and substantiate the future potential.

We begin the process once VR has an understanding of the company and marketplace, combined with experience, know-how and insight to the goals of our clients.

Financial Recasting:  This is a crucial element in demonstrating the real earnings history of the company to potential acquirers. In presenting earnings history for the company, the financial statements for the preceding three years are recast. This procedure is necessary to present the financial history in a manner an acquirer will understand and takes into account unusual, avoidable and nonrecurring expenses.

Business Proforma: P&L statements, balance sheet, cash flow and working capital requirements are projected by year for a 5-year period.

Market Analysis: Research identifies the current and potential markets of the business and consideration is given to the company’s position within its industry. Growth factors, industry trends and competition are evaluated.

After the completion of the Valuation you will be presented with the expected market value for your enterprise.

VR Business Profile 

This confidential document is the foundation of the marketing campaign for the divestiture of your business. The VR Business Profile will present your business in the most attractive manner, explaining the company’s past performance and revenue generating operations along with future opportunity. The company will be positioned and presented in the format necessary for acquisition.

Acquirer Identification

Through a professional and confidential marketing campaign, VR Mergers & Acquisitions will identify qualified candidates to acquire your company. Matching your business to the most desirable entity will create synergies that will warrant the highest value for your enterprise. Through the VR Buyer Alert Program, your business profile can be presented confidentially to candidates who have shown interest in acquiring similar organizations.

Negotiating and Transaction Structuring

During the negotiation and transaction structuring process, you will work closely with your VR Mergers & Acquisitions intermediary who is experienced in the complex process of the transaction. VR M&A manages the negotiations and transaction structure while taking into consideration the benefits you are trying to achieve by the divestiture of your business. Once preliminary negotiations are completed a tentative agreement is structured. This can be in the form of a Letter of Intent or a definitive Purchase Agreement. Either document outlines the primary economic considerations or purchase price, as well as other pertinent contingencies and issues – such as tax and legal matters, representations made by the seller, financing, or owner participation in the business post acquisition.

Due Diligence

The acquirer begins due diligence with their team of professionals. Their agenda is to confirm that the value of your company and its presentation is an accurate account of what is being acquired. This is the most delicate part of the transaction and where Valued Representation by your VR intermediary is called upon to ensure the transaction moves forward in a timely manner toward a successful conclusion.

Closing of a Successful Transaction

When the needs and expectations of both the acquirer and seller have been met, a definitive Purchase Agreement is executed by all parties to the transaction. This document will allow for the legal transfer of the stock and/or assets of the company to the acquirer for the financial consideration agreed upon.

Note: For a more detailed account of the acquisition process, ask your VR intermediary for a copy of

“Valued Representation…when selling a business.”

or

“Valued Representation… when acquiring a business.”