The better the question. The better the answer. The better the world works. У вас есть вопрос? У нас есть ответ. Решая сложные задачи бизнеса, мы улучшаем мир. У вас є запитання? У нас є відповідь. Вирішуючи складні завдання бізнесу, ми змінюємо світ на краще. Meilleure la question, meilleure la réponse. Pour un monde meilleur. 問題越好。答案越好。商業世界越美好。 问题越好。答案越好。商业世界越美好。

Does selling your business add up?

Preparing financial information to maximize the value of your exits

 

To maximize value from an exit, a seller needs to encourage competition among potential buyers. One effective way of doing that is by providing sellers with financial information that makes their equity case clear.

Many sellers put deal value at risk by not allowing themselves enough time to prepare and present the information in the way that buyers need. By taking the extra time to tailor the financial information for different buyers, sellers can help them to see the value story more easily, thereby generating more competition for the asset, and so increasing deal value.

Time and effort is required to produce suitable information that presents the asset in a way that:

  • Enables potential investors to see value in what is being sold
  • Facilitates investors’ financing needs
  • Anticipates regulatory requirements

Executives and their teams need to understand, sooner rather than later, how a fully informed approach to preparing financial information for a carve-out can add significant deal value.

5 rules: prepare your financial information for exits

1

Underpin the equity story for the most likely buyers (MLBs) — this means the seller should provide information that illustrates the value of the asset to the MLBs, not simply catalogue what is for sale

2

Reliably support the MLBs’ decision-making, particularly:

  • To help MLBs decide whether to buy and at what price
  • For financing
3

Be granular, to explain revenue and margin — buyers usually want more detail than vendors expect

4

Recognize that the needs of strategic and financial buyers usually differ

5

Ensure that the transaction structure can be delivered

5 rules: prepare your financial information for exits

1 Underpin the equity story for the most likely buyers (MLBs) — this means the seller should provide information that illustrates the value of the asset to the MLBs, not simply catalogue what is for sale

2 Reliably support the MLBs’ decision-making, particularly:

a. To help MLBs decide whether to buy and at what price

b. For financing

3 Be granular, to explain revenue and margin — buyers usually want more detail than vendors expect

4 Recognize that the needs of strategic and financial buyers usually differ

5 Ensure that the transaction structure can be delivered

 

EY - Does selling your business add up?

Download the full report as a PDF

  
EY - Martin Hurst

Martin Hurst
Divestiture Advisory Leader Europe, Middle East, India and Africa (EMEIA) +49 6196 996 27365 martin.hurst@de.ey.com

EY - Charles Honnywill

Charles Honnywill
Divestiture Advisory Leader United Kingdom and Ireland (UK&I)
+44 20 7951 4058 chonnywill@uk.ey.com

EY - Carsten Kniephoff

Carsten Kniephoff
Divestiture Advisory Leader Germany, Switzerland and Austria (GSA)
+49 40 36132 17664 carsten.kniephoff@de.ey.com

Know the regulations of your exit option

Depending on the type of transaction you are planning, the rules and regulations you’ll have to satisfy can be very different:

EY - Does selling your business add up?

EY - Does selling your business add up?

Once you have decided to exit, you need to consider the specific information requirements of your chosen exit option, or of more than one exit option if you are following a dual-track strategy.

Face the carve-out challenges: do you have the right answer?

EY - Does selling your business add up?

EY - Does selling your business add up?

EY - Does selling your business add up?

Meet the needs of specific buyers

Different types of investor have different ways of looking at a transaction. In particular, although sellers often treat them the the same, strategic and financial buyers look for different things from financial information.

To help buyers see the potential your asset has for them, make sure your financial information meets their needs:

  • Strategic buyers will be most interested in how the carved-out business is likely to fit with — and add value to — their own.
  • Financial buyers will be more interested in how the business is likely to perform as a stand-alone unit, and in the potential for operational improvement.

And don’t forget that different buyers within each of these groups can also have very different needs.

The right information for the right outcome

To maximize the positive impact your financial information can have on deal value, you should:

  • Start planning early

    You need to leave enough time to determine exactly what information is required and how best to deliver it.

  • Make sure your data is flexible and sufficiently detailed

    You may need to reconfigure information quickly to suit different needs and changing circumstances.

  • Always keep potential buyers in mind

    By focusing on what buyers want to see, you can deliver financial information that generates interest, increases competition and raises deal value.

To learn more about how your financial information can help you maximize deal value, read the full report.