Going concern sales
The process is typically made up of a number of stages;
Initial marketing – potential parties will be notified of the business for sale and adverts may be placed in newspapers such as the FT and in trade magazines.
Confidentiality agreements – the Insolvency Practitioner (IP) will normally require non-disclosure agreements to be signed prior to releasing a sales memorandum.
Sales ‘pack’ – this sales memorandum will contain some background information, management accounts, details of what is for sale, timetable, etc. This will normally contain only basic information.
Site visits – those parties that are interested in the business will normally be allowed to visit the site, have a look around and talk to key staff.
Additional information – specific documents and information may be required in order to make an informed decision, which may take time to produce. A list of requirements should be given to the IP as soon as possible. Any commercial information may not be available or only made available to advisors on the provision that it is not disclosed to their clients.
Other negotiations – it may be necessary to discuss the matter with certain parties that would be key to the success of the business should it be acquired. This could include landlords, key staff, etc.
Offers – a deadline will have been set by the IP. This may not give a significant amount of time as this will depend on how long the IP can keep the business running before a wind down strategy would be required. See offer section which provides information about making offers.
Deposit – a deposit may be required to show the purchaser’s commitment to the purchase.
Final due diligence – the leading bidder may need to undertake a review or tasks that could not be undertaken previously such as contact with customers or provision of other commercially sensitive information.
Contracts – the IP will issue a contract for negotiation.
Completion – once all parties have agreed the terms of the contract then the transaction can be completed.
Handover – the purchaser will be required to take immediate control of the business. This will normally involve notifying staff, setting up new credit lines with suppliers, contacting customers, finalising utility accounts, etc.
