Strategic Sale
What is it?
- A type of transaction that provides capital to companies as well as strategic value in exchange for shares.
- An inflow of money from a prominent investor in a similar field taking a controlling stake (51% or more) in the company.
- Investment is collaborative and typically long-term in nature.
What to expect?
- The investor will likely require a greater involvement in operations and board decisions.
- The structure of the sale must be clear prior to and during the sale process. It should be understood by both parties that the sale will either be funded by debt only, equity only, or a mix of both.
- The sale process would approximately last between 6-12 months on most cases and would include an extensive due diligence (financial, legal, technical, commercial, and tax) by the buyer.
- Companies must acknowledge the potential risks that can emerge from the due diligence and provide ways to mitigate the risks post –sale.
Who should consider
- Companies who seek to benefit from having a relationship or affiliation with a strategic investor who may be a larger player in the same industry and are willing to sell a majority stake of their business.
- Investors who seek to obtain a strategic advantage through a collaborative agreement with the company that may be developing a novel product or technology, such that the new creation can be utilized by the investor.
- Companies who are willing to be evaluated by a third-party appraiser for a fairness opinion of the company.
How Can Bayfront Help
Strategy Review
Detailed analysis of the Client and advise on value-adding corporate strategies.
Competitive Benchmarking
Detailed analysis of the Client and benchmark them against Industry standards.
Structuring
Detailed analysis of the Client’s capital structure and advise on the optimal proportion of equity and debt.
Deal Execution Management
Assisting in execution of deal processes, most commonly in the form of capital raising.
Valuation
Helping to navigate through the complexities of transaction, improve transaction execution, and increase the chance of success.
Information Memorandum
For presenting to different target audience such as lenders, new sales relationships, new client relationships.
Governance Review
To determine the specific governance needs of a company and assist in areas which would minimize risks and help achieve business goals.