Behind the scenes of a corporate deal: What does an adviser really do?
Imagine you’re a successful business owner (maybe you don’t need to imagine) and you’ve worked hard to build your empire over the years. Maybe you want to sell your business and realise the value of all your efforts, perhaps you’re ready to retire, or you just feel like it’s the right time to move on and do something else. If you are thinking about selling up, you need an experienced partner to advise you and make sure your firm is sold to the right buyer for the right price. But do you know what corporate advisers actually do behind the scenes to make sure your sale goes without a hitch and the final result exceeds your expectations?
Firstly, your adviser should know how to ramp up the competitive tension. They will convince potential buyers of the value of your business, and will make sure they know other parties are interested too. This carefully applied pressure helps buyers realise they are not the only players in town, and can give them the push they need to make a serious offer. To do this, your Deal Handler builds up relationships of trust with a number of different buyers and skillfully manages all negotiations.
This brings us to the second point: attention to detail. This is especially important during the negotiation process, and is one area where your Deal Handler can add serious value to the transaction. They should be able to identify areas where the target business can improve its profitability and make savings, and demonstrate how a business is likely to grow in future, raising its worth in the eyes of potential acquirers.
And finally, your deal executive should be able to head off trouble at the pass. What this means is ironing out the detail and providing advice on ‘heads of terms’, the legal name for the agreement which sets out the basis of a deal before it is signed. In the unfortunate, albeit unlikely, event that a deal may fall through or the seller suffers down the line because of an errant clause in the heads of terms, it is important that as many points as possible are agreed early on.
These three principles usually keep everything running smoothly, but sometimes even the best laid plans can go awry, and it’s at times like these you need someone who will go the extra mile. One senior deal executive at KBS Corporate went above and beyond to get a deal over the line in a transaction involving a manufacturing company. The business was family-owned, but the family members were at a dispute and no longer trusted each other. The day before completion, it came to light that one of the family members had made a private agreement with a buyer without telling anyone, threatening to blow the deal, and the family, even further apart.
KBS’s executive made a personal visit to a family member’s house late at night to collect paperwork, and hurriedly send it to the solicitor just in time for the midnight deadline. His behind the scenes efforts saved the entire deal from collapse. This is just one example of the lengths that your adviser should go to in order to ensure that the deal is completed on time and, more importantly, gains the best terms for you.