After years of shouldering the risks and stresses of company ownership, it’s time to secure a just reward for your hard work and dedication. But the prospect of exiting may seem daunting, with legal and logistical complexities to navigate.
Strategic Transactions sell-side M&A services cater specifically to businesses in the Australian food & beverage industry. Our goal is to facilitate a lucrative, clean, and hassle-free exit from your business, ensuring confidentiality and efficiency throughout the process.
With our expertise, you can remain focused on building your business while we work alongside you, structuring your deal and guiding you through every step of the journey.
Trust us to handle the complexities, allowing you to achieve a successful transition and maximise the value of your business.
Schedule a free, confidential 15-minute call with our expert advisors to explore a business sale strategy and next steps.
While Strategic Transactions are both fit and licensed to bundle up the sale, we will work with a commercial property specialist to ensure we maximise value. Similarly, with plant and equipment assets we will partner with asset valuers and auctioneers for any residual assets.
Whether, who and when you tell is really on a case-by-case basis. The answer is based on probabilities of damage to the business from competitor activity, the potential to lose key employees and several other factors. Strategic Transactions will work with you, the owner, to determine the best course for your circumstances.
The answer is usually yes, at least for a period to ensure the expertise transition. Various consultancy-type agreements can be drawn up to remunerate an owner for any extended periods of time post-sale. This would be in addition to any earn-out arrangements agreed upon during the sale process.
We use a multifaceted approach to determining the right asking price for a business. We analyse financial performance through historical data and market comparables, evaluate strategic value and assets, and consider our seller goals and market conditions.
Negotiation dynamics and client preferences further shape the pricing strategy. We conduct an appraisal or valuation, while also factoring in legal and regulatory considerations. Flexibility is key, allowing adjustments based on buyer feedback and due diligence findings.
Throughout the process, transparency and collaboration with our client ensure alignment with their objectives. By integrating quantitative analysis with qualitative insights, we set an asking price that optimises value and attracts potential buyers, ultimately facilitating a successful transaction.
Given our strong industry focus, our primary focus is on targeting strategic buyers who can benefit from acquiring your business’s assets, capabilities or market position. We contact the owners or their acquisitions director directly, highlighting why the company makes for an attractive acquisition. We also identify actively seeking acquisition opportunities or have expressed interest in similar businesses.
To maintain confidentiality while generating interest, we prepare teaser documents that provide high-level information about the business without disclosing sensitive details. These teasers are distributed to a select group of potential buyers to gauge interest and solicit inquiries. We create customised marketing materials, including executive summaries, information memorandums, and presentation decks, to showcase your business’s strengths, growth prospects, and investment opportunities.
If necessary, and to reach a broader audience we back this up by leveraging online platforms, industry-specific websites, and M&A marketplaces to list your business. We may also conduct direct marketing campaigns, such as email marketing, direct mail, or targeted advertising, to promote your business to a curated list of potential buyers.
In addition, we can tap into M&A / broker networks, professional associations, and referral partnerships to expand the reach of the marketing efforts and access a wider pool of potential buyers. Also, our relationships with other intermediaries, such as business brokers, investment bankers, and financial advisors, leads to valuable referrals and collaboration opportunities.
Ensuring confidentiality is paramount in M&A transactions to protect sensitive information, preserve competitive advantage, and prevent potential disruptions or leaks that could jeopardise the deal. Before any party becomes involved in a transaction, they are required to sign an NDA (Non-Disclosure Agreement) that legally binds parties to maintain confidentiality and restrict the use of disclosed information for any purpose other than evaluating the transaction.
For particularly sensitive transactions, we set up secure virtual data rooms (VDRs) to facilitate the exchange of confidential documents and information between parties involved in the transaction. VDRs employ advanced encryption and security measures to protect data from unauthorised access, hacking, or data breaches.
Finally, after the transaction closes, we ensure that any remaining sensitive information or documents are properly archived, securely transferred, or destroyed in accordance with the parties’ agreements and legal requirements.
Our main criteria is the strategic fit between the buyer and the business being sold. We will assess whether the buyer’s industry focus, business model, capabilities, and objectives align with our client’s market position, growth prospects, and strategic goals.
Subject to that criteria, we assess the financial strength and resources of potential buyers to determine if they have the financial capacity to complete the transaction. This includes evaluating their ability to fund the purchase price and associated transaction costs.
We gain insights into the buyer by assessing their past M&A transactions, integration capabilities, management expertise, and success in realising synergies and value creation. We also consider the cultural compatibility between the buyer and the target company, including values, management style, corporate culture, and organisational fit. A strong cultural alignment enhances post-acquisition integration and reduces the risk of conflicts or disruptions.
The timeline for selling a business can vary depending on factors such as the complexity of the transaction, market conditions, buyer interest, and our clients’ objectives. Typically, the process may last from as little as 3-4 months to over a year,. Still, efficient execution, effective communication, and proactive management of the process can help expedite the sale while maximising our client’s value.
The process involves four distinct phases.
The preparation phase involves assessing business readiness, preparing the financials, organising the documentation and identifying potential buyers.
The marketing phase showcases the business’s strengths, growth prospects, and investment opportunities. We produce materials including confidential teasers, information memorandums and presentation decks and then conduct campaigns and qualify buyers.
The negotiation phase starts with discussions with qualified buyers, including initial meetings, site visits, and Q&A sessions to address buyer inquiries and concerns. The receipt of non-binding offers from interested buyers leads to negotiation execution of a term sheet with the key terms of the transaction.
The final, closing phase involves due diligence and finalisation of the purchase agreement, including the purchase price, deal structure, closing conditions, representations, warranties, and indemnities.
There are various risks to be encountered throughout the sale process. By proactively identifying and addressing these risks and challenges, we can mitigate potential negative impacts and increase the likelihood of a successful and smooth transaction.
The transaction may fail to materialise due to factors such as buyer financing issues, regulatory hurdles, unforeseen liabilities, or changes in market conditions. Of course, price negotiation is a key issue, especially if there is a disconnect between the seller’s valuation expectations and the buyer’s perceived value of the business.
Various other risks can occur throughout the process. Confidentiality breaches through unauthorised disclosure can disrupt operations, damage relationships, or devalue the business. Addressing due diligence findings, resolving issues, and managing buyer concerns can be challenging, particularly if there are undisclosed problems or discrepancies. Employees, suppliers and customers may become concerned about the potential impact of the sale on their jobs, relationships, and future with the business.
There are various other risks, such as legal & regulatory, integration risks and often
the emotional impact of selling a business for our clients who have invested significant time, effort, and personal equity into building and growing the business.
Most of the abovementioned risks can be mitigated through proactive planning, effective communication, and strategic execution.
Incidents of deal failure can be reduced by a thorough investigation of potential buyers to assess their financial capability, credibility, and commitment to the transaction. Price negotiation can be reduced by establishing a realistic asking price based on market conditions, financial performance, and growth prospects.
Confidentiality breaches can be mitigated through the use of NDAs (Non-Disclosure Agreements) and limiting the dissemination of sensitive information, while employee and customer concerns should be addressed by well-timed transparent and proactive communication about the sale, emphasising continuity, stability, and opportunities for growth.1
Finally, the emotional impact can be reduced through support from family, friends, and professional advisors and maintaining a positive outlook that focuses on the benefits of the sale
We will help determine the most appropriate deal structure based on our client’s objectives, the target company’s characteristics, market conditions, and tax considerations. This may involve evaluating options such as stock purchase, asset purchase, merger, joint venture, or other hybrid structures.
This will likely include a valuation, negotiation of terms, risk assessment and mitigation, financial modelling and analysis and synergy analysis. Such analysis will be backed up with legal and tax planning, optimisation, and regulatory compliance if required.
Our typical fee structure consists of various components designed to compensate the advisor for their services throughout the transaction process. There are several components to our fees.
Our success fee is the primary component and is typically calculated as a percentage of the total transaction value. The rate can vary depending on factors such as the size and complexity of the transaction.
We also charge a retainer fee to cover upfront costs and expenses incurred during the initial stages of the engagement, such as conducting preliminary due diligence, preparing marketing materials, and identifying potential buyers. This retainer fee may be credited against the success fee upon closing of the transaction.
Finally, we will seek reimbursement expenses incurred in connection with the transaction, such as travel expenses, legal fees, due diligence costs, marketing expenses, and third-party service fees.
Our clients should consider other costs associated with selling a business. These may be categorised as follows:
Legal Fees – drafting and negotiating transaction documents, conducting due diligence, advising on legal matters, and ensuring regulatory compliance.
Accounting and Tax Advisory Fees – accounting services, tax planning, and financial analysis related to the transaction, including structuring the deal, evaluating tax implications, and preparing financial statements.
Transaction Costs-associated with third-party services and transaction-related expenses, such as valuation fees, appraisal fees, regulatory filings, escrow fees, and closing costs.
Advisory Fees for Other Professional Services: such as consulting services, strategic advisory, financial modelling, and post-merger integration planning.
Contingency Costs – funds set aside to cover unexpected expenses, contingencies, or unforeseen challenges that may arise during the transaction process.
Strategic Transactions are industry specialists with a deep understanding of the Australian food & beverage industry. Through this, we have developed deep industry knowledge, networks and insights. As a result, we can offer tailored solutions, identify strategic opportunities and anticipate sector-specific challenges.
