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Our Process

Our Process

Seed to Harvest’s M & A Process is designed to reach the best buyers and create competitive friction in order to get the best offers from them.  Our goal is for you to have multiple offers so that you can select the offer that provides the best combination of price and non-financial considerations.

 

Our 10-step M & A Process includes:

  1. Understand the business owner’s objectives.

Your objective may not be the highest price.  You may have other objectives, such as preserving jobs in your community, continuing the healthy culture you have spent decades growing, providing growth opportunities for your employees, or ownership opportunities for your management team.  We spend the time necessary to understand your objectives because we desire to provide you with options that best meet your primary objectives.

  1. Prepare a Business and Value Assessment Report.

Before we agree to work together on the sale of your company, Seed to Harvest will work with you to prepare a Business and Value Assessment Report.  This report will provide you with an expected range of value from a sale of the business so that we can both be comfortable that the likely valuation falls within a range that will be acceptable to you.  We only take on a small number of engagements each year, so it is critical that if we work together, we are all on the same page regarding an acceptable valuation.

The Business and Value Assessment Report will also identify any risks that may be perceived by a buyer or value enhancement opportunities, both of which may impact the desired timing of undertaking a sale of the business.

As part of this process, we will work with you to develop a growth strategy and supporting financial model, as well as to recast historical financial statements to remove the impact of discretionary owner compensation and one-time expenses.

  1. Prepare marketing materials.

Seed to Harvest will work with you to gather the appropriate information to create compelling, marketing-focused documents that tell the story of the business in such a way as to generate interest and excitement from potential strategic buyers, private equity buyers or investor/operators.  First, we will prepare a one page, blind Executive Summary to use in outreach efforts.  Second, we will write a comprehensive Confidential Information Memorandum (“CIM”) that will describe the company’s background, industry, key investment merits, operations, products and services, financial performance and growth opportunities in detail.  The CIM will be provided to potential buyers only after they have been screened and signed a Non-Disclosure Agreement.

  1. Develop and implement marketing plan.

Seed to Harvest will work with you to prepare a list of potential strategic buyers, private equity buyers and investor/operators who may have an interest in acquiring the business.  We generally recommend a broad list of buyers, because the 5 or 10 buyers that you believe are most likely to buy the business may, for one reason or another, not be interested in making an acquisition at the time you are ready to sell.

We will jointly agree on the list of buyers that Seed to Harvest will approach, and can time the approach of competitors until we know there is likely a transaction to be done, if desired.  We will also agree on whether or not it makes sense to list the company on any of the many “businesses for sale” websites that exist.

Our primary method of targeting buyers is phone and email.  We will research each buyer in advance of our outreach to make a specific pitch as to why they should have an interest in acquiring your business.  We do not use direct mail, or blast generic faxes or emails.

When we market the business, we do not provide a purchase price.  There are two reasons for this: first, a price puts a cap on what a buyer will pay; and second, the buyers for businesses with $2 to $10 million in revenue are generally sophisticated enough to do their own analysis and don’t need an asking price to decide how much to offer.

  1. Qualify and screen interested buyers.

Before we share information beyond the Executive Summary with a prospective buyer, they are screened to ensure they have a legitimate interest in the business and the ability to complete a transaction.

  1. Prepare you and your management team for buyer interactions.

In advance of any conference calls or meetings with buyers, you and your team will be prepared with information about the buyer and its management team; why they are interested in your business; and any areas of concern so that you are prepared for the conversation.  Seed to Harvest attends all conference calls and meetings to act as historian and ensure that discussions are productive to both parties.

  1. Generate multiple options in a controlled bidding process.

The ultimate goal of our efforts is to provide you with multiple offers so that you can determine the best mix of price and non-financial terms to meet your ultimate objectives.  We have determined that the best way to do that is through a carefully controlled auction process, where buyers are moved through the process so that offers are received within a short period of time, enabling us to create competitive pressure so that buyers put their best offers on the table.

  1. Manage pre- and post-Letter of Intent due diligence.

Seed to Harvest will work with you to populate an online data room that contains all of the information that buyers will need to determine a value and prepare a Letter of Intent.  Once the Letter of Intent has been signed, we will work with your team to respond to the buyer’s due diligence requests on a timely basis to ensure that the transaction moves quickly and smoothly towards a close.

  1. Negotiate Letter of Intent (“LOI”).

Once you have decided upon the buyer with whom you would like to complete a transaction, we will work with you, your accountant and your attorney to negotiate a Letter of Intent that spells out all of the major business terms that will be in the final purchase agreement.  Our goal is to ensure that all key issues are addressed in the LOI so that they don’t become sticking points later in the process.

  1. Provide closing and post-closing assistance.

Seed to Harvest will work with you and your team, your outside accountant and attorney, as well as the buyer’s deal team, throughout the closing process to ensure that all parties continue to move forward on a timely basis to a closing.  We will manage due diligence requests, schedule integration planning meetings, ensure that drafts of the purchase agreement and ancillary documents are being prepared and turned around by the attorneys on a timely basis, and negotiate any business issues that arise in the purchase agreement.

After the transaction has closed, Seed to Harvest will continue to be available to you if any questions or issues arise with respect to post-closing working-capital true-ups, escrow fund releases, and earn-outs.