Sales Process Evaluator
The distressed M&A sale process is often controversial.
Creditors are threatened with demenished returns. Constraints such as inadequate time and liquidity frequently result in "melting ice cube" 363 sale processes. Secured lenders want to avoid losses. Losing bidders can argue that the process wasn't fair and insider bids are certianly not uncommon. Typically the M&A advisor only provides easy-to-manage headline numbers to describe their sales process. The following are common phrases one would expect to hear when evaluating a sales process:
- We contacted more than fifty bidders.
- We sent the book to EVERYONE.
- Buyers can visit an electronic data room.
- We ran a thorough process.
- We exhausted all avenues to find a buyer.
The Sale Process Evaluator is a consistent, quantitative method to analyze the sale process of an asset or business entity. It is based on measuring information in five key areas of the process that are common to all sales:
- Information
- Audience
- Timing
- Delivery
- Execution
The Sale Process Evaluator considers a total of 40 questions covering these five key areas. Each question is fact-based about the actual process and is answered with a specific number or a Yes or No response.
The SPE uses an algorithm based on these inputs to deliver an answer about whether the sale process adequately exposed the company to the market. The algorithm adds and deducts points for actions that are good or not good practices and weights each of the five criteria to develop a consolidated score. Scores for each element are also provided which can highlight strengths and weaknesses of the sale process.
In general, for a process to be adequate, at least three of the five areas must have strong scores. So for example, contacting the right audience and demonstrating good execution and clear delivery can compensate for rushed timing and imperfect information. Users can also adjust the weightings for the five areas and individual answers to perform a sensitivity analysis and generate a revised score (and possibly a revised conclusion).
The investment banker’s log of buyers is used as a reference to answer the questions about the sale process. Answering the questions for an evaluation can easily be completed in less an hour and application does not require deep M&A or investment banking expertise.
The Sales Process Evaluator is designed for
- Restructuring advisors and lawyers involved in the sale of a company in bankruptcy.
- Stakeholders in a bankruptcy case looking to understand if a company was adequately shopped.
- A judge or mediator trying to understand the sale process a company used and how to evaluate it thoroughly and in a cost effective manner.
- A creditor that wants to reach quick conclusion on a sale process.
- A director of a company going through a controversial sale process that wants maximum protection from litigation or other criticism.
- A banker seeking to exercise best practices and self-assess your work.
If You want
- An independent analysis of any sale process that is both cost effective and easy to administer.
- A way to explain better the thoroughness of any sale process to potential objectors.
- Channel people’s disagreements into easy to understand concepts and common themes that are easy for judges to understand.
- Discover the weakest links in a sale process.
- Reach quicker resolution in disputed asset sales.
- To assess the job your banker did in order to further protect a board in a controversial sale process.
The Sales Process Evaluator offers
- Cost and time effective use of basic information regarding a sale process.
- Non-technical approach to evaluating any M&A process.
- An absolute scoring model with a quantitative, objective approach.
- A solid architecture to defend or attack a sale process.
- Easy to understand concepts for parties determining the outcome of the sale.
- Perform sensitivity analysis for nuances of a given sale or perspective.