How We Sell Your Company
Once you've engaged us to sell your company, we jump into action in a methodical process to find you a buyer willing to buy the company on your terms. We handle everything from start to finish and utilize our experience, reputation and time to deliver results. Our process includes the following steps:
- Financial and strategic value analysis.
- Preparation of company for sale.
- Development of confidential memorandum.
- Identification of buyers that best meet our client's objectives.
- Pitching possible buyers the strategic value of the company.
- Negotiating with interested buyers to obtain the best possible Letters of Intent.
- Managing due diligence.
- Managing the purchase agreement drafting and negotiation process.
- Ensuring a successful close.
The typical timing of a transaction from when we are engaged to when the deal closes is between 9 and 15 months, with 12 months being the average. This is common in the industry, so avoid other professionals that might tell you a quicker time. Most people wonder why it takes so long, so provided below is a breakdown of the timing:
- Pre-marketing phase. This includes steps 1 through 4 above. Timing typically takes 1-2 months, but can be accelerated if absolutely necessary.
- Marketing phase. This includes steps 5 and 6 above. Timing typically takes 3-7 months (3-4 months is most common). In order to maximize interest, 3 months is generally a minimum.
- Due Diligence phase. Timing typically takes 2-3 months. Typically, this timeframe depends on how quickly the buyer can move and how quickly the seller can generate the required due diligence materials. Our goal is to minimize the time spent in this phase.
- Purchase Agreement phase. Generally, this takes approximately 1 month to complete and sometimes overlaps with the Due Diligence phase.
Orion's fee structure includes an engagement fee and a success fee.
The engagement fee is a non-contingent amount that we require to ensure you are committed to us, our process and are serious about acting on reasonable offers. Any firm that does not charge an upfront engagement fee either does not have the correct licensing requirements (which can create substantial liability for you), will not put forth significant efforts in the engagement, or is trying to build their reputation and expertise at your expense.
In addition, since this is a commitment fee, we credit any engagement fee towards the success fee. We regularly spend in excess of one thousand hours closing a deal and unlike other "engagement fee mills," most of our income comes from closing successful deals and not by charging engagement fees.
The success fee is a graduated percentage that we receive upon a successful close. Even if there is an earn-out or contingent payment, we only get paid when you get paid, keeping our interests completely aligned. Success fee percentages vary from engagement to engagement and are based upon the deal size, type of engagement and other factors. Beyond our ability to get the deal closed, the incremental amount our clients receive from the sale of their company using our services is typically greater than our success fee.
Every client has different needs and objectives and we tailor a plan that best meets your needs, budget and risk appetite. Contact us and we can discuss a game plan and engagement that works for you.