The Q1 Process
Our objective is to obtain the best combination of price, the form of consideration, deal structure, and terms & conditions within an agreed timeline. We establish a short-list of strategic acquirers and private equity firms with the most to gain from acquiring our clients’ companies. By creating a discreet and competitive bidding process, leading the negotiations, and actively managing the sale process through to legal completion, we deliver the best possible deal, structured for the maximum tax benefit, while maintaining strict confidentiality throughout the acquisition process.
Valuation is a combination of proven historical results and future opportunity:
When a company is acquired, the buyer looks to the future and to what they can achieve with the business over the coming years. With this in mind, we work with our clients to identify the strategic value of their companies to potential acquirers, in particular, the ways in which our client’s products and services will enhance an acquirer’s existing business and the new geographic regions and market verticals that can be accessed through an acquisition. Then we go to great lengths to convey these strategic opportunities to potential acquirers, highlighting and enhancing the value of the purchase well beyond historical financial performance and future projections – value that is reflected in the sale prices they ultimately receive.
Look beyond the obvious potential acquirers:
Overseas and foreign potential acquirers are often overlooked in the sale process of many companies. However, doing so can be an expensive mistake.
We actively look to engage US, European, Asian, and Latin American acquirers, and even if an eventual acquirer for a business is another Canadian company, the fact that they are competing with interested international parties will have a positive effect on the eventual sale price.
Similarly, ideal potential acquirers are not necessarily competitors or even businesses within the same sector. They may well be from neighboring industries selling different products and services but are looking to expand into related or new markets.
Proactively contact potential acquirers:
Many of our competitors take a very hands-off approach to contacting potential acquirers, for example by blast emailing “ABC Company for Sale” sales sheets or listing the Company on the myriad of M&A marketplaces. Companies that consider these methods of selling their company as being viable are not companies that we would work with. As a business owner, you would not send out mass emails to unqualified firms asking them if they have any interest in utilizing your services or buying your product. Therefore, why would you consider taking this approach to make the most important sale of your life?
Our proactive approach is fundamental and vital to the successful sale of our client’s businesses. Proactively contacting each potential acquirer by telephone to present the acquisition opportunity skillfully and professionally is consistently more effective than any other form of communication. It is the same process that our clients apply to their own products and services and they have come to expect no less than a very “high touch” approach from us.
Few other factors maximize the value of a sale transaction than having multiple potential acquirers competing to acquire it. Competition can not only improve the speed and terms of the sale but also ensures that deadlock is never an issue in negotiations. We go to great lengths to qualify and attract as many interested parties as possible to the process.
See the transaction through to completion:
When potential acquirers have shown an interest in our client’s business, Q1 engages in the preliminary negotiations that lead to substantive offers and Letters of Intent. If multiple offers have been received, we work with our client to help them understand the advantages and disadvantages of each offer to determine which has the highest probability of being completed in a timely and successful manner and is the most attractive from both a financial and structural perspective.
Following the client’s decision to accept an offer, Q1 Capital handles all of the subsequent negotiations and facilitates and manages the due diligence process. This can be the most critical stage of the transaction and can often lead to difficulties. That is why it is crucial for companies that are being acquired to have a firm like Q1 Capital in their corner because we have the resources and experience that are required to see complex deals through to completion. Furthermore, negotiating the details of the transaction on our client’s behalf and working through contentious issues allows our client to maintain good relations with their acquirers which is important if our client is going to continue in the business post-acquisition.
When all of the deal terms have been agreed upon and Due Diligence has been completed, Q1 Capital manages the process of completing the transaction, working alongside and in conjunction with the client’s lawyers and accountants in order to see it through to completion in a timely, organized, and judicious manner.