As a managing director at FMV Capital Markets, an Irvine, California-based investment bank, Allan Siposs has advised dozens of companies on how best to prep for sale. He calls his process a pre-transaction “Due Diligence Dress Rehearsal.” Here are a few of his thoughts on what to do well before opening night:
- Confirm that formation documents, meeting minutes, summary of rights of each class of stock and stock ledger are all up to date and in good order, and address any potential shareholder issues or pending litigation that might derail the company’s sale.
- Prepare audited financial statements for at least three historic years, as well as detailed revenue and margin analyses by customer, product, region, etc., and a summary of all outstanding credit facilities.
- Prepare a complete set of financial projections.
- Create a detailed organization chart and job descriptions for each position, listing key managers and their specific responsibilities.
- Provide a list of sales by customer and annual revenue trends for the top twenty customers.
- Address all existing or potential regulatory issues, and all potential past and current tax issues.
- List all owned facilities and real estate, and summarize the operations, capacity and equipment related to each facility.
- Summarize all current and past company trade secrets and intellectual property, including ownership and expiration date of relevant patents.
Visit www.ChiefExecutive.net/PreparingtoSell for a one-year plan for preparing your company for sale.