Representing the Seller of a Middle Market Business

Seller’s Objectives

• Obtaining the Highest and Best Price for the Company’s Owners
• Obtaining Terms that have the most favorable tax treatment
• Meeting non-financial considerations: Fair treatment of employees, suppliers, and customers
• Maintaining confidentiality prior to and after sale

SUMMA Financial Group’s Role in Marketing a Company

• Preparation of a market valuation of the company:
  • Adjustments to financial statements to show actual cash flow
  • Forecast of growth of the industry and the company
  • Analyze competition
  • Comparison to sales of similar firms (Comparables)
  • Note that an asking price is not disclosed to potential buyers
• Preparation of a Confidential Business Review documenting major company characteristics: Strengths & Weaknesses
• Identification of qualified buyers:
  • From SUMMA Financial Group’s data base of buyers
  • Corporate Buyers, Private Equity Groups
  • Advertising from Internet and print media
• Analysis of offers
  • Negotiation of terms to meet seller’s requirements
  • Supporting buyer financing process
  • Support of due diligence process
  • Expediting of legal and accounting issues of buyer and seller
  • Taking action to reach a mutually agreeable closing

For Sale By Owner Alternative

Owners often have a potential buyer they know e.g. customers, suppliers, employees, and competitors. This can lead to numerous pitfalls:

• A single buyer has little incentive to make an offer at a price as high as the market would produce.
• Putting together the materials and adequately marketing a company is a full time job requiring a special combination of skills and discipline in marketing, finance, and negotiation
• Confidentiality is lost because there is no intermediary to preserve the privacy of information.

The fees paid to M&A intermediaries are a good investment because with our experience and expertise you will get a higher sales price, better terms, and earlier closing of the sale than in the For Sale By Owner alternative.

Is SUMMA Financial Group, LLC the right firm to market your company?

• Access to Buyers - SUMMA has a data base of over 5,000 qualified buyers
• Effectively over $300M in transactions completed
• Ethical standards - A large number of outstanding references
• Experience - SUMMA Financial Group professional's experience includes:
  • Over twenty years business experience each owning their own business, or being a senior executive
  • Extensive formal education at the graduate level. Our degrees include Accounting, Engineering, Finance, and Law
  • We are leaders in our profession and community
  • History - Founded in 1985

The Selling Process

1. Client and SUMMA Financial Group, enter into agreement to value the Client's Company and prepare a Confidential Business Review.
2. A formal valuation of the company is prepared to the highest professional standards.
3. A Confidential Business Review is prepared that will explain the company's past and sell its future. No asking price is set. The buyer makes the first offer.
4. A second agreement is signed and the marketing of the company is done through national and international advertising, contacting known interested parties, investment groups, and a variety of other prospects.
5. Companies and individuals that respond are screened to determine the qualified and truly interested parties.
6. Telephone meetings and on site visits by buyers provide information to both buyer and seller on the desirability of making and accepting an offer.
7. Buyers submit letters of intent, which are the focus of negotiation for establishing price and terms. Each interested buyer is asked for a letter of intent.
8. After acceptance of a letter of intent, the buyer further examines the business and contingencies are removed. SUMMA professionals keep the process moving toward a conclusion.
9. SUMMA Financial Group, LLC professionals provide leadership in the process of drafting final agreements and closing the transaction.