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THE CODILIGENT DIFFERENCE FOR SELLERS . . . |
Typical Broker |
Codiligent |
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Analysis & Valuation |
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Use Basic Multipliers to Determine Value Using Industry Averages |
X |
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Perform thorough financial trend and ratio analysis of historical numbers to identify strengths, weaknesses, marketability issues, and opportunities using Codiligent’s proprietary analysis tool |
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X |
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Recast historical financial statements, create statements of cash flow, determine operating free cash flow, and develop five-year projections based on historical trends, ratios, and qualitative information |
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X |
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Utilize a market comparable approach to value that looks at both industry averages and carefully selected closed business comparables, and takes into consideration the strengths of the company |
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X |
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Utilizes discounted cash flow and capitalized earnings approaches to value |
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X |
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Utilizes other approaches to value when warranted |
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X |
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Utilizes internal rate of return and net present value calculations to check whether estimates of value make sense |
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X |
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Produces 70-Pages of data to support estimates of value and to help ultimately negotiate an optimal deal structure |
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X |
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Packaging |
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Produce a generic package of information (1-3 pages) which often has less information than a residential real estate listing |
X |
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Develops custom teaser package (3-7 pages) that is compelling enough to entice a buyer to sign a confidentiality agreement to gain more information |
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X |
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Develops confidential package (40-150 pages) that provides enough detail to allow buyer to make an informed acquisition decision with limited follow-up questions, resulting in increased probability of offers and higher quality offers. |
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X |
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After buyer signs a non-disclosure agreement, limited information is provided which often includes little more than copies of tax returns and financial statements. Without extensive follow-up questions buyer will not have confidence to move forward. |
X |
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Develop due diligence package up front with all of the typical documents a buyer will require after agreeing to purchase business |
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X |
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All packages are based on comprehensive quantitative and qualitative evaluation to ensure that the business is accurately marketed in a compelling way. |
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X |
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Marketing |
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Places advertisements on all major business for sale websites |
X |
X |
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Places newspaper advertisements |
X |
X |
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Determines characteristics of the most logical acquirer and then builds a marketing plan around reaching these highly targeted acquirers |
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X |
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Utilizes tools such as Broadlook Technology software and extensive research to help locate acquirers who meet the acquirer profile |
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X |
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Mass mailing of teaser packages and postcards to target profile acquirers |
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X |
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Advertising in industry association publications and websites |
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X |
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Promote the business as a co-broker opportunity to hundreds of brokers nationwide |
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X |
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Contact buyers in broker’s database of contacts that may be interested in the business |
X |
X |
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Negotiation |
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Plays a relatively passive role in helping client negotiate deal. Views their primary job as matching buyer and seller - the seller and seller’s attorney play the lead role in negotiating the deal |
X |
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Proactively helps client to establish a negotiation strategy using tested ideas and tactics |
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X |
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Helps clients understand the value of asking for and granting a variety of concessions, and discusses creative deal structure options |
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X |
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Codiligent uses proprietary tools to help clients understand and evaluate the risk-adjusted present value of different deal structures |
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X |
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Will actively negotiate a deal on behalf of a client within certain parameters, or will act more in an advisory capacity depending on seller’s preference. |
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X |
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Due Diligence |
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Many brokers don’t believe they should play a role in the due diligence process beyond facilitating the meetings |
X |
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Manages due diligence information requests to ensure that all conditions are met, and that the information is delivered in an organized way to prevent deal-killing confusion |
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X |
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Active participant in the due diligence process, to make sure that while information is presented accurately it is also presented in the best possible light |
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X |
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Closing |
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“Let the buyer and seller and their attorneys work out the closing details” |
X |
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While it is appropriate for a seller to engage other professionals to assist with the closing (i.e. attorney, escrow company, etc.), the closing process still needs to be managed. Codiligent helps manage the process to ensure a successful and on-time closing |
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X |
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