THE BUYING PROCESS


“Working with a Pacific Broker/M&A Advisor makes the process of buying a business so much simpler.”

J.W. (Buyer Client)

Pacific M&A and Business Brokers offers multiple options of service to buyers in search for a good business.

Passive Main Street Program

This is a no-fee-to-buyer-based program that is passive in nature. Under this program a professional Broker/M&A advisor will meet with you to determine and understand your acquisition criteria however, your ability to find a business matching your criteria will be limited to the businesses listed in Pacific’s inventory. This program is designed for those looking for a “Main Street” business where the buyer is non strategic, non synergistic, non industry, or non financial in scope. You will also be notified of new Main Street listing opportunities that are added to the inventory. Though the Broker/M&A Advisor is working with you, the general business search is “Passive” in process

Passive M&A Program

This program is specifically designed for more advanced buyers where their interest is strategic, synergistic, industry or financial in scope. This may take the form of non engagement or a limited engagement (hence passive). If you are an M&A buyer, please discuss your required criteria and desired options with your Pacific Broker/M&A Advisor.

Proactive Program

Available to both Main Street and M&A buyers, this is a fee-based pro-active program that is not limited to passive matches. Under the Pro-Active-Program we take the time to determine in great detail the specifics of your desired criteria, succinctly articulate them in a blind solicitation mass mail broadcast to expose the specifics of your criteria to thousands of our internal contacts and those of our affiliates. In addition, we orchestrate a targeted search within the specific geographical, financial, industry, and other such criteria, and explicitly solicit a specific list of targeted potential business opportunities that are not necessarily on the market.

This makes this program laser focused in its search criteria. It generates acquisition search results that are much more accurate and effective in both criteria match, accuracy, as well as in the time it takes to find the right business opportunity.

The following is an outline summary of our successful business buying process:

Stage One: Qualification & Understanding

Due to the sensitive nature of the information, during this very initial contact with you, whether in person or otherwise, we seek to ensure your interest is serious and qualified. Serious damage to a business could result if premature disclosure is made that a business is for sale where employees, suppliers, competitors or customers of the business find out. For this reason, and as a requirement of our contractual obligation with any seller, we are required to maintain full and absolute confidentiality. You will therefore be expected to execute a Non Disclosure and Non Interference Agreement (NINDA) which the Pacific Broker/M&A Advisor will provide to you. Also, the Broker/M&A Advisor is also obligated to ensure that you have the financial capacity to acquire a considered specific business and may request some financial capacity, and/or net worth information in order to satisfy such obligation. It is important to know that such information is not disclosed to anyone, not even the seller of the business, prior to and without your explicit written consent. The information is used is strictly internally for the specific qualifying purpose.

As part of this initial first stage, the Pacific Broker/M&A Advisor will also provide you with any known disclosures, including disclosing the type of “Agency” he or she, and the Brokerage would have with you. In many business purchase and sale transactions, it is not uncommon for a Broker/M&A Advisor to be in a Dual agency or Limited Dual Agency relationship with both buyer and seller. Though often seen as a potential conflict, if and when such relationship is professionally maintained, and where the Law of Agency is strictly adhered to, it actually affords one a greater level of professional competency, ethics, openness and responsibility, resulting in a true win/win transaction for both buyer and seller. Before the Broker/M&A Advisor is able to work with you in a Dual or Limited Dual Agency, he or she would need you’re authority, and as such the Pacific Broker/M&A Advisor will be sure to have such a conversation with you to ensure that the relationship is disclosed, and that you clearly understand the meaning of the engaged, and or implied Agency Relationship. An open “Agency” discussion resulting in a clear understanding of such relationships will form part of this First Stage.

Stage Two: Businesses Search Criteria

During this second stage and in order for us to successfully match a business of your desired criteria that will become a “good fit” and “no regrets” business, it is important that we are clear in our interpretation and understanding of your business search criteria, wishes and desires. Naturally, you also need to be realistic and hence a candid search criteria discussion will take place between you and your Broker/M&A Advisor so that your needs and desires are clearly articulated in your profile including your goals and expectations. Naturally, this will include an assessment of your financeability, core operational competencies relative to the type of business you desire, and more.

Once clear, we will review available business opportunities that match your expressed criteria and where each is presented with the appropriate overview, or detailed profile based on the Broker/M&A Advisor’s comfort with your qualification and interest level. These documents will contain key decision-making information from market and industry data, to financial metrics. Often buyers like to get much more detailed financial and competitive information at this stage but, as previously articulated, for confidentiality reasons more detailed information will be limited to the post offer due diligence stage. Upon satisfactory review of the presented materials, and assuming your interest level remains high enough to proceed further and learn more about the business, a meeting is arranged to view the business and meet the seller. Typically, this is a discrete visit, arranged after hours to preserve the confidentially that the business is for sale.

Stage Three: Preparing an Offer

Upon a satisfactory visit to the business and or meeting with the seller, should you wish to move forward, the Broker/M&A Advisor will review your expectations, the material information including a review of the business value and its value drivers from your point of view, and thereafter, assist you in negotiating and preparing an offer, letter of intent, or expression of interest as applicable, or request further information if so required. As previously stated, any reasonable request for additional information will be honoured, however due to confidentiality issues, some information may not be released by the seller until an accepted offer is in place. A seller may restrict some of the information they are willing to provide to you until such time as they determine the seriousness of your interest through the presentation of a written offer. Your Broker/M&A Advisor will be in a position to best determine the conditions of honouring any additional information requests.

Under the Pro-Active program, there may be an additional assessment of value step prior to any offer consideration and your Broker/M&A Advisor will be happy to go through such details with you if considering that program.

Any presented offer will typically be subject to many contingencies and when prepared by a Pacific Broker/M&A Advisor will adhere to our standard format to provide for your protection throughout the offer process. Your Broker/M&A Advisor will also know what is likely to be acceptable by the seller thereby avoiding much back and forth though one should expect some typical negotiations in the offer process. An offer will also typically contain specific terms and conditions such as conditions precedent to your obligations of buying, conditions of closing, required covenants of the seller, training and transition terms, non-competition clauses, times and dates of acceptance, subject removal dates, and others. A reasonable deposit based on the purchase price will typically follow within 24 to 48 hours after an acceptance of such offer or counter thereof. The deposit is then typically increased within 24 to 48 hours of the subjects and/or contingencies being removed. Such deposits are held in Pacific’s trust account similar to a purchase of traditional real estate pending the close of the transaction.

Stage Four: Due Diligence & Definitive Agreement

Due Diligence is a process whereby the buyer reviews and affirms that all the provided information is true, accurate and satisfactory. Such review encompasses all levels of information including but not limited to corporate if applicable, legal, contractual, human resources, financial, IP, taxation and much more. The level of required due diligence will vary based on one’s level of comfort, trust, and risk tolerance. Your Pacific Broker/M&A Advisor will assist you in the due diligence process and management thereof.

Upon satisfactory completion of the due diligence process, comes the removal of the “subjects” or waiving of the “conditions precedent” to a buyer’s obligation to firm up the offer.

The solicitors for each respective side typically now commence their work in the creation of the purchase and sale agreement which is typically drafted by the purchaser’s lawyer. Buyers and sellers are typically responsible for their own respective legal costs.

The Pacific Broker/M&A Advisor will work with you to ensure that the lawyers and or accountants and any other involved advisors have all the required information to perform their work accurately and efficiently, and reflect the agreed to terms and conditions within the draft agreements, that all transaction related instruments are in place and generally successfully and effectively managing the whole process from inception to closing.

Stage Five: Closing

Where inventories are included an inventory taking is typically performed prior to closing and is coordinated and facilitated by the Broker/M&A Advisor as well as such information as pro-forma working capital calculations where the sale of shares applies, and much more. The closing of the transaction takes place once the agreement of purchase and sale as well as any other required ancillary agreement is agreed to by the parties. Once again, your Broker/M&A Advisor is there every step of the way to ensure a successful acquisition and close.

You are now the proud owner of your new business.

Post closing, the Pacific Broker/M&A Advisor will also coordinate and facilitate such post closing activities as closing financial statements, release of hold back funds, progress monitoring etc. in order to ensure a smooth transition to your new business ownership.