NorthStar’s Transaction Navigator™
The M&A Process. Perfected.
Selling a business can be a complex, difficult and frustrating process – but it doesn’t have to be!
With this goal in mind, the NorthStar team called on its collective 85 years of M&A experience, covering all facets of the business acquisition process, to collaborate on the premier business analysis, marketing and sales system in the industry - NorthStar’s Transaction Navigator™. This time-tested approach to managing the business transaction journey is broken out into 10 clear, practical stages so that you always know exactly where you've been, where are and where you're headed.
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01
Exploration Meeting
What does your dream exit look like?
Curious, informative, confident and honest – that’s how you can expect your NorthStar advisor to act during your first conversation exploring the possibility of selling your company. What we can assure is that you won’t feel pressured or mislead! The Exploration Meeting is exactly what it says it is – a chance for both you and NorthStar to ask the most important questions of each other, whatever those questions may be. While one of our goals is to learn as much as we can about your business and what makes it unique and valuable, a bigger objective is to understand what motivated you to request this meeting in the first place. Ultimately, we want to gain as much insight and clarity as possible into what your dream exit looks like!
02
Valuation & Sellability Assessment (the VSA™)
Understanding what your business is
worth, and why
At this point in the early stages of considering a sale of your business, it’s hard to grasp the importance of this step. However, by far the number one reason businesses don’t sell comes
back to mismanaged expectations of a business’ value. The ultimate success of your M&A process begins with an accurate valuation, as well as an honest analysis of its market attractiveness. NorthStar’s VSA™ is a comprehensive analysis of your business designed to not only provide you with a market-based opinion of value, but also offer insights into its
marketability and sellability. It explores intangibles that can either increase or reduce the market value of your business, and includes observations about the availability of acquisition
financing, likely types of potential buyers and estimated time to close. Simply put, the VSA™ tells you how your business is going to be received if and when it hits the market.
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03
Decision Point
Are you ready to go to market and find a buyer for your business?
NorthStar’s goal is to be a valuable resource for business owners considering the sale of their companies. To that end, when it comes time for you to make a choice between moving forward with the sales process or standing pat and continuing to operate the business, we are agnostic to that outcome. What we want is for you to be armed with as much accurate and constructive information as possible about the value and sellability of your business so that you are able to make an informed decision that makes the most sense for you, your family and our company. The NorthStar team is a collection of current and former business owners, so we understand the gravity of this decision for you. We pride ourselves on being your partner during this critical determination, and NEVER try to "sell" you on the idea of selling your business.
04
Transaction Team
Surround yourself with the right people having the right skills
The good news here is that if you’ve made it to this stage of the process, then you obviously see value in professional representation – now we need to make sure your entire transaction team is put together. The process that you have just decided to undertake is not easy, and there will be many twists, turns and obstacles you have never experienced before. This is why it’s critical to have a team of experienced professionals, each with their specific roles and responsibilities, working with you to see this process to a successful conclusion. NorthStar will run point and steer the ship, so to speak, offering overall guidance and experience - but we’re just part of your team. You’ll need a transaction or M&A attorney that specializes in acquisitions of your type and size. You’ll need an accountant or CPA that understands your financial records and filings and can answer detailed questions about your books. You’ll need a wealth manager or financial planner that can help you devise a plan for the windfall of proceeds from the sale you’re about to encounter. You’ll also need a tax advisor, which could potentially be one of the parties already mentioned, to help you understand the tax impact of a business sale and plan accordingly.
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05
Building a message to excite buyers about your business
When NorthStar begins the process of preparing a business to go to market, we have to balance and integrate two primary factors – the business’ unique story and selling proposition with NorthStar’s
tried-and true marketing tools. Every business we represent
possesses distinctive characteristics that, when evaluated and understood by potential buyers, either add or detract from the company’s attractiveness. At the end of the day, buyers buy what they can
understand and have confidence in, which makes it imperative that
we take the time to craft a customized message and strategy that
conveys those defining and exciting aspects of a business
opportunity. With this carefully-constructed marketing message,
the NorthStar project management team produces the promotional collateral necessary to inform and educate the buying public about
your company. These tools include a Pre-arket Teaser, Confidential
Information Memorandum (CIM), Business Video Presentation &
Owner Interview, FAQ Supplement, as well as a numerous additionalfollow-up pieces and social media announcements.
06
Going to Market
Reaching as many ready, willing and able buyers as possible
You can have the most attractive business on the market with the most effective marketing collateral available – but if the right
buyers aren’t exposed to the opportunity, all of the effort
put into strategizing and packaging is wasted. NorthStar’s
objective when taking a business to market is simple –
“eyeballs!” We want your business on the desk of every single
buyer in the marketplace that’s searching for an acquisition
opportunity. While that may sound like a lofty and unrealistic goal, it’s one that we’re not shy about pursuing. We implement our
marketing process from two distinct positions – best described as
“rifle” and “shotgun” approaches. The rifle approach is a surgical,
targeted strategy that utilizes NorthStar’s active buyer network
of more than 10,000 unique contacts. In our database we collect
critical data about each buyer’s specific search criteria – target industries, purchase price constraints, EBITDA ranges, etc. – we know what these buyers are trying to buy. When we bring
a new business to market, this is where we start – segmenting
our database to identify potential buyers we know want to see
your business. We give these buyers a little head-start as a
“thank you” for being a part of our network by sending them the
confidential Pre-Market Teaser on your business. From there, we
roll out the shotgun approach, which involves confidential online
promotion of your business on a half-dozen platforms. Our
marketing process is second-to-one, and two figures support that
opinion - nearly 250 buyers look at each one of NorthStar’s
listings on average, and more than two-thirds of our listings close
with buyers already in our database.
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07
Buyer Qualification & Management
Ensuring only serious, qualified buyers occupy your time
NorthStar has a simple approach when it comes to business buyers – generate maximum engagement with buyers with minimum involvement of the business owner. As previously mentioned, NorthStar’s marketing program will generate an average of almost 250 prospective buyers for your business. Imagine, if you will, the time and effort it would take for you to entertain 250 individual buyers for your business – the non-stop questions, requests, phone calls, video conferences, meetings, etc. It’s illogical to expect a business owner to manage that kind of buyer activity from just a few parties, let alone hundreds. Now, consider another figure 98%. That’s the average percentage of asking prices that NorthStar’s deals close for. Now imagine, if you will, the likelihood that working with just one or two buyers would command that level of competition and sale price ratio. Working with NorthStar gives you the best of both scenarios. We’re going to the ones working directly with 250 buyers for your business, managing their questions, requests, calls and meetings – not you. Which also ensures that the offers you receive will come from buyerscarefully vetted and qualified, that know they are one of dozens of other interested parties competing for the chance to acquire your company. In the end, the only buyers you’re going to interact with are those that have demonstrated the interest, eagerness, financial ability and qualifications required to do a deal with you. Read more about NorthStar’s Buyer Process.
08
Purchase Offers & Negotiation
Selecting the right buyer and the right deal for your business
In 100% of NorthStar’s past engagements, we were able to produce multiple written offers from qualified buyers. As previously mentioned, those transactions ultimately closed at sale prices averaging 98% of the original asking prices. While part of that success comes from our systematic process of evaluating your business, marketing the opportunity and managing interested parties, another major piece of the puzzle comes from helping you choose the right “fit” to be your acquisition partner and take over your company. In many cases the most attractive deal on paper is not the best buyer for the business. When these purchase offers start to roll in, NorthStar utilizes its Offer Evaluator to provide guidance to our clients. This tool not only compares buyer proposals in an apples-to-apples method, but it also takes into account the importance you place on specific terms and criteria. This perspective goes all the way back to the Exploration Meeting and our understanding of your dream exit. By truly knowing what deal terms and buyer traits are most critical to you vs. the ones making little-to-no difference, as well as determining these same factors from the buyers, we are able to utilize our experience to advise you on which proposal offers the best fit and certainty of close, and negotiate a final letter of intent (LOI) that all parties can get behind and be excited about.
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Strategy & Packaging
09
Due Diligence Coordination
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More than 70% of attempted acquisitions fail in due diligence
Of all the aspects of the M&A process that NorthStar excels in, the biggest thing we believe that puts us head-and-shoulders above other M&A advisory firms is our due diligence management system – NorthStar’s DealLog™. Why did we put so much emphasis on this stage of the acquisition process? Because due diligence is where transactions go to die, and we believe that most of these deal-killers can be avoided with systematic, collaborative and attentive oversight. NorthStar’s DealLog™ is a 125-point closing checklist that covers every single critical aspect needed to go from executed LOI to successful closing, and even some
post-closing items. But the checklist is just a tool – the real magic is in the approach we take to ensuring we stay one step ahead of the process, so that the sellers and buyers are always confident and never left in the dark. Buyers rave about NorthStar in this regard, commonly commenting that their due diligence experiences with us at the helm were the most comprehensive, smoothest and collaborative they have every encountered.
10
Successful Closing
What will the day after closing bring to you?
You made it! To get here, you’ve not only spent years building a
great business, but over the past several months you and your
transaction team have spent countless hours to help you
realize your dream exit! There are still going to be a few critical details to manage the day of your actual closing, and NorthStar will be right there beside you to see this all the way through
to its end. However, even though this marks the end of your
business ownership journey, it most likely does not mark the end
of your involvement with, or responsibilities to, your business. Too many business owners approach the final days before closing without a clear picture of what day one post-close is truly going to look like and entail. NorthStar doesn’t let those details slip through the cracks. In order to avoid any uncomfortable or combative situations with your buyer after sale, we help ensure that the frantic chaos leading up to closing doesn’t cause all parties to lose sight of this important discussion. We help facilitate a plan that outlines what the actual expectations are for that monumental day.
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Welcome the the 17% Club!
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