| In my prior business experience in the information | | | | business broker chapter M&A Source, etc. |
| technology industry, it was a very common | | | | 4. Is your firm known for a particular industry |
| practice for potential buyers to submit a Request | | | | niche? Transaction niche? Please describe. |
| for Proposal in order to make a purchase decision. | | | | 5. What steps do you take to insure the |
| After several years as a Merger and Acquisition | | | | confidentiality of the sale process? |
| advisor, I finally got an RFP. A light bulb went off. | | | | 6. Please Send a sample of your deliverables: a. |
| This is the most important "purchase decision" a | | | | Blind Profile b. Confidentiality Agreement or NDA c. |
| business owner will ever make, and yet the | | | | The Book, Memorandum or Executive Summary |
| process of selecting an advisor in a multi million | | | | d. If you do a mailing - typical contents |
| dollar transaction was generally less diligent than | | | | 7. Describe your process of marketing your sell |
| the purchase of a $200,000 software product. | | | | side engagement with a typical timeline from start |
| I gave this a great deal of thought and came to a | | | | to finish: i.e. day 1 sign engagement agreement, 1 |
| conclusion. These business owners are very | | | | Week submit first target database for approval, |
| smart and accomplished people, but they generally | | | | Week 2 submit draft of Profile/NDA for |
| will only sell one business in their lifetime. They | | | | approval.............Confidentiality Agreements Signed, |
| knew how to evaluate every other product or | | | | Executive Summary is completed, etc. |
| service relating to their business because they | | | | 8. Describe the Marketing Process - is it posted on |
| had made those purchase decisions multiple times | | | | Internet Sites, emails, mailing campaign, direct |
| over the years. | | | | telephone calls, etc |
| It occurred to me that they did not have the | | | | 9. What is the profile of the "A Target" buyers |
| experience to know the right questions to ask in | | | | for my company? Briefly describe. |
| order to objectively evaluate one M&A firm | | | | 10. If you have any client reference letters from |
| against another. Their instincts are generally pretty | | | | the past 24 months, please include 2 or 3 in your |
| good, so in the selection process we normally go | | | | package. |
| through, they bring in the 3 or 4 firms for | | | | 11. As one of our final selection criteria, will we be |
| presentations, check a few references and make | | | | able to speak to references? |
| a decision on a gut reaction. | | | | 12. Detail your fees. a. Up-front payments b. |
| The purpose of this article is to provide those | | | | Monthly fees c. Minimum Cash at Close d. |
| business sellers that possess great instincts an | | | | Expenses e. Other f. In lieu of this, please submit |
| additional tool to objectively compare Merger and | | | | your agreement with the fees as they would be |
| Acquisition advisors by asking the right questions. | | | | set for this sell side engagement. |
| Below is a sample RFP that should be helpful in | | | | 13. What is your philosophy on putting a price tag |
| your selection process: | | | | on my company? |
| Request For Proposal for the Merger and | | | | 14. Describe your process of keeping your client |
| Acquisition Advisor Sell Side Engagement for XYZ | | | | informed on the progress of the sale. g. What |
| COMPANY, INC. | | | | reports do you submit to the client? Include |
| COMPANY DESCRIPTION | | | | samples please. h. How often are reports |
| Briefly Describe your company | | | | submitted? |
| Approximate 2005 Revenues - ? Responding | | | | 15. How will I know that I am getting the best |
| Company Name Responding Company Description | | | | price and terms if your firm represents my |
| Years in Business Primary Contact Name for this | | | | company for sale? |
| Engagement Phone Number Email address | | | | 16. Does your contract call for exclusivity? |
| Company Address Company Web Site | | | | 17. If I don't think you are doing a good job, what |
| 1. In the past 24 months what transactions have | | | | options do I have? |
| you completed? Company Name Nature of | | | | 18. What about a "tail" on the agreement? If your |
| Engagement Industry Description of Client | | | | firm is fired, what prospects carry a tail for fees |
| Example XYZ Company Sell Side Engagement | | | | to your firm? How long is the tail? |
| Healthcare information technology | | | | 19. Please explain why your firm is the best fit for |
| 2. How many Investment Bankers work for your | | | | our sale engagement. |
| Firm? | | | | 20. What are your thoughts about valuations for |
| 3. Who would be working as the lead on my | | | | our company/industry. |
| engagement? Please include Bio. a. Include any | | | | 21. What would your firm do in to advise us on |
| professional designations i.e. Series 7, CBI b. | | | | improving on our transaction value? |
| Include any industry associations i.e. IBBA, local | | | | |