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The Mill Creek System

 Opinion of the Value and Pricing:

 

  • Establishes a clear starting point in setting an asking price
  • Helps to answer the question, “is it the right time to sell?”
  •  Can be used to firm up financing before the sale, resulting in more cash to the seller. Provides a mechanism to review after-sale cash and tax positions

 

Positioning the Business for Sale:

 

  • Compile critical data including financials, tax returns, equipment lists, contracts and leases
  • Author Confidential Selling Memorandum

 

A.Executive Summary

  • Investment Highlights
  • Financial Highlights
  • Training and Support
  • Capital Requirements

 

B. Business Description

 

  • Investment Highlights
  • Owner Qualifications
  • Marketing and Sales
  • Operations
  • Personnel
  • Capital Equipment
  • Location and Real Estate

 

C. Competition and Market Assessment

  • Competition
  • Market Dynamics

D. Growth Opportunities

E. Financials Schedules

 

Identify and Qualify Buyers:

 

  • Potential buyers review and approve a Confidentiality Agreement before sensitive information disclosed
  • Buyers complete profile with buyer’s background, employment history and financial situation.
  • Mill Creek provides only enough information for the buyer to make an offer. Full due diligence will only be allowed after the buyer has made an offer and the seller has agreed to the terms of the offer.

 

Strategic, Financial and Individual Buyers:

 

  • Research market, identify strategic buyers and provide basic “teaser” data.
  • Research Private Equity Groups which meet strategic profile.
  • Provide Confidential Selling Memorandum and respond to information.
  • Database marketing of business to individual buyers – websites, MCP databases

 

Negotiate Offers:

 

  •  Manage Limited Auction
  • Obtain Letters of Interest from buyers

 

Author Asset Purchase Agreement and Other Documents:

 

Locate and Negotiate Financing for the Buyer

 

  •  Strategize financing options based on Opinion of Value.
  •  Identify banks most likely to finance transaction.
  • Change of ownership financing up to $2 million – SBA 7a.
  • Conventional financing.
  • Real Estate financing including SBA 504.
  • Submit deals to banks for pre-approval
  • Assist buyer in negotiations including documentation.
  • Follow through with loan officers and underwriters.

 

 Manage Due Diligence:

 

  • Financial data
  • Income Statements and Balance Sheets Cash Flow
  • Review of customer lists and vendors
  • Review of operating procedures
  • Inventories
  • Other Current Assets
  • Fixtures, furniture and equipment
  • Leases and other contingencies

 

Close the Transaction:

 

The closing documents define the terms of the transaction:

 

  • Asset/Stock Purchase Agreement
  • Bill of Sale
  • Notes
  •  Security Agreements
  •  Guarantees
  • Leases

 

Important elements that often require negotiation are

 

  •  Allocation of Purchase Price
  •  Representations and Warranties
  • Indemnifications
  •  Notes
  • Personal Guarantees
  • Lease Assignments
  • Assumption of Specific Liabilities

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