Process

There are a number of distinct steps in the deal process and they follow a specific sequence. At K-2 Partners, our key objective is to make the process as easy for you as possible, while ensuring that you remain informed at all times and your objectives are met in a timely manner.

Confidentially/ non-disclosure agreement (NDA)

An NDA is signed by all parties to protect the confidentiality of your business as well as our business relationship. At K-2 Partners, we regard integrity and confidentiality as core values.

Engagement agreement

The Engagement Agreement memorializes the relationship between you and K-2 Partners.

Business assessment

To help us provide you with a fair value estimate, we undertake a comprehensive evaluation to develop a clear picture of your business. This includes categories such as financial (income statements, balance sheets, capital expenditures), operational (physical plant, technology, systems) and management (sales force performance, product suite, organization model). The key objective is to identify all the strengths as well as any weaknesses, so that we can best position the business for potential buyers

Valuation

Aside from the value of physical assets and goodwill, several other aspects play a role in the valuation. Such factors as the competitive landscape (who’s acquiring right now), geographic location (some are more attractive than others at different times) and specific needs (one company wants to fill a ‘gap’ in a specific market) also play a major role.

At K-2 Partners we don’t believe in promising unrealistic valuations. Our valuation will be fair and realistic, taking into account all of the above factors. We would much prefer to pleasantly surprise you later by exceeding the original estimate.

Strategy recommendations

After a thorough understanding of your objectives, we will propose a strategy for the marketing of your business, based on a combination of the assessment, our knowledge of the competitive landscape and our industry connections. This will be individually targeted at specific potential buyers, in the knowledge that each may be looking to achieve different objectives via the acquisition and will view/value your business differently.

Aside from maximizing value, a selling strategy also needs to achieve a number of non-financial objectives- in other words, a ‘best fit’. Often sellers are concerned about their employees and look for buyers where the employees will have ongoing careers, or perhaps real estate is an important part of the deal outcome.

Conversely, buyers often seek well run businesses with a good core management team. We have the expertise to put the right parties together to yield the best outcome for both.

Produce a ‘go-to-market’ deal book

Based on our assessment and mutually-agreed strategy, we will prepare a document highlighting your business, as well as a prospective buyer NDA which will be used to solicit bids from prospective buyers. The complexity of the ‘book’ depends on the size and complexity of the business. A well run single or dual market business can be sold through a less formal process.

Assessment of bids

We will assess the bids and bidders, and then present you with a summary and comparison. We will recommend the bid that best matches your financial, structural and personnel requirements. We will negotiate and accept the bid on your behalf.

Letter of Intent – (LOI, term sheet)

The LOI spells out the key aspects of the deal, including price, terms and other conditions. As the name implies, both parties intend to proceed with the transaction, subject to the fulfillment of certain conditions, such as the completion of satisfactory due diligence.

Due diligence

This step is designed to give the buyer an opportunity to physically look at the business and verify the representations made in the deal book.

It usually encompasses more detailed questions about the business and such things as the sales process, a review of customer contracts, site visits and perhaps a meeting with the management team. External legal and accounting advisors are also typically engaged to support your information disclosure.

The key to a smooth due diligence process lies in being clear and factual when producing the deal book so that buyer doesn’t find any ‘nasty surprises’ and of course in having good records and documentation for your business.

Closing

In this final step of the process, your lawyers work side-by-side with our team to complete the deal and ensure fair sale agreement terms and timely funds disbursement.