Move guide
Get ready to launch
Your report suggested a move on at least one of these three questions:
- whether you could open a data room next month;
- whether you have a plan, a team, a timeline and advisers lined up;
- whether the business can keep running while key people are taken up by the sale.
This move guide closes the gaps vendor due diligence found and builds a data room that could open next month. Then it sets one plan for the sale, and arranges cover for the people it will take.
1. When it applies
Use this move guide if your report placed any of these questions at "Red flag" or "Doubtful".
| Question | Where it may sit today | Where this move guide aims |
|---|---|---|
| Could we open a data room next month? | Red flag: "A data request would take a month and a prayer, and we couldn't name a large customer we'd let a buyer call." Doubtful: "The documents exist somewhere and assembly is unstarted; a list of friendly customers for buyer calls hasn't been thought about." |
Supported: "Vendor DD done, gaps fixed, and a list of large, friendly customers briefed and willing to take a buyer's call." |
| Do we have a plan, a team, a timeline and advisers lined up? | Red flag: "Sale is discussed only when a buyer knocks; no bank, lawyer or VDD provider has been spoken to." Doubtful: "Intent is agreed; nothing is mapped, and no bank, lawyers or VDD providers are chosen." |
Supported: "Roles, incentives and the external advisers (investment bank, lawyers, VDD providers) aligned to one plan and timeline." |
| Can the business keep running with key people's bandwidth taken by the process? | Red flag: "Nobody has asked who runs the business while key people are in data-room meetings." Doubtful: "Key people are known; no one covers them, and the process is expected to run alongside their day jobs." |
Supported: "Cover arranged and decision rights delegated, so the business runs while key people are absorbed by the process." |
If all three already sit at "Supported" or higher, skip this move guide.
It comes last because it puts into the data room what the earlier steps proved.
2. What to do
Five steps. They take two to three months.
- Close the gaps vendor due diligence found. Assemble a data room that could open next month.
- Brief a list of large, friendly customers to take a buyer's call.
- Agree the timeline, the roles and the incentives in one plan. Appoint the investment bank, the lawyers and the due diligence providers. Table A below records it.
- Get every shareholder telling one story with one set of numbers.
- Name every key person the sale will absorb. Delegate their decisions, arrange cover, and run the business that way for a quarter before launch.
3. What to produce
One table.
Table A. The sale plan
| Workstream | Lead (name) | Adviser | What it delivers | By week | Cover for the lead's day job |
|---|---|---|---|---|---|
| Data room | |||||
| Story and numbers | |||||
| Due diligence | |||||
| Legal and documents | |||||
| Running the business |
A lead with nothing in the last column is a forecast miss waiting to happen.
4. A worked example
Illustrative. Written for this move guide. It describes no client.
A family-owned transport company plans to sell to a fund.
The data room.
- Vendor due diligence had found missing customer contracts and two years of patchy fleet records. Both were fixed, and the data room was ready a month before launch.
The plan.
- One plan set the timeline, each workstream's lead and the advisers. The three family shareholders agreed one set of numbers.
The cover.
- The finance manager would spend most of three months on the sale. A contractor took over month-end, and ran it for a quarter before launch.
Three months on.
- 1 data room ready a month before launch
- 5 workstreams, each with a named lead
- 1 quarter run with cover in place
On a retake, all three questions could be answered at "Supported".
What it looked like in our work
From our own work. Redrawn.
For a financial services group selling two of its businesses, we set the sale up as a set of workstreams with one timetable.
- AdvisoryProject management, the communications plan, the deal structure, the sale documents, and the negotiation.
- FinanceVendor due diligence on tax and accounts, and separate accounts for each business for sale.
- CommercialA business plan, forecasts and market view for each business for sale.
- SeparationWhat the remaining business looks like, and the plan to pull each business out.
- Legal and riskLegal vendor due diligence, the deal documents, and regulatory approvals.
- 1. Kick-off, and understand the business, weeks 1 to 2
- 2. Vendor due diligence: finance, tax and legal, weeks 2 to 3
- 3. Separation planning, weeks 3 to 4
- 4. Sale documents and marketing plan, weeks 2 to 5
- 5. Draft the deal documents, weeks 4 to 12
- 6. Marketing, and first offers, weeks 5 to 10
- 7. Buyers' due diligence, weeks 10 to 13
- 8. Final offers and negotiation, weeks 12 to 19
- 9. Signing and announcement, week 19
- Project management and the commercial work run throughout.
Each workstream had its place in one timetable, from kick-off to signing.
5. Effort and dependencies
- Owner and chief executiveAgree the plan and keep the shareholders on one story.
- Chief financial officerRuns the data room and the numbers.
- BoardAppoints the advisers.
What you need
- The answers from finding the problems before a buyer does.
- The buyer map from knowing who buys and why.
How long
- Two to three months.
What gets in the way
- A forecast missed during the sale. A buyer reprices the whole plan on it.
6. How will you know it worked?
The test is whether a buyer could start due diligence the week you launch. Retake the check before you appoint the bank. Each of these should be true when you answer:
| Question | You can answer Supported when | A document alone does not count if |
|---|---|---|
| Whether you could open a data room next month | Vendor due diligence is done, its gaps fixed, and large, friendly customers are briefed to take a buyer's call. | The documents exist but nobody has put them in order. |
| Whether the plan, team and advisers are lined up | Roles, incentives and the advisers are tied to one plan and timeline. | The advisers are chosen, but the shareholders tell different stories. |
| Whether the business keeps running | Cover is arranged and decisions delegated, so the business runs while key people work on the sale. | Cover is planned but has not been tried. |
The worked example is illustrative.
Think we've used your work without proper credit? Tell us and we'll fix it.