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The Mertz Taggart process is designed with the following objectives:

  • Maintaining confidentiality

  • Finding your ideal buyer or investor

  • Compelling them to make their best offer

  • Closing the transaction as quickly as possible, while minimizing surprises


The process follows five basic phases:

Planning, Documentation, Marketing, Due Diligence, and Closing.

The details of each transaction are, of course, different. The process is flexible and is tailored to match the specific needs of each client.



Before attempting to sell your business, we invest time to prepare it for presentation to potential buyers.

Planning Phase for Guide to Selling Your Business


Much as one would stage a home for sale, we assist sellers in cleaning up financial data, gathering the right information for an industry buyer’s review, and ideally, going to market when sales are trending up.


What is driving your desire for a transaction? Is there a value threshold that needs to be met? What qualities do you want in a buyer or financial partner? Are you interested in retaining equity? The more we know about you and your company, the better we can position your company to potential buyers and/or investors...when the time is right for you.


When we take your company to market, we will not include an asking price. In order to ensure that your expectations are set appropriately, Mertz Taggart will render an opinion of value from the very beginning of the process. We will also provide you with general industry trends affecting your business so that you can make the most informed decision on whether or not to go forward with a potential sale of all or part of your business.


In order to maximize value, it does take time to maximize value! The typical process takes about 5 months from start to finish and you need to be mentally committed to the process and running your business. We’ll shield you from much of the heavy lifting, but it will still require some time from you, especially at the later stages. 



Proper documentation involves developing and sharing the right information with the right buyers at the right time, confidentially.

Documentation Phase for Guide to Selling Your Business


The Confidential Information Memorandum (also known as “The CIM” or “The Book”) is only distributed to potential buyers that have been screened by Mertz Taggart, and who have signed a binding confidentiality agreement. In the CIM, we tell the company’s story: it’s history, organization, services offered, value differentiators, financial reporting. We include other information that helps a buyer better understand your company and its potential value to them. We will work with your team to create financial projections in order to accurately put your company’s best foot forward.


How do you market a company to potentially thousands of buyers and still keep the sale confidential? We first create and present what is called a “teaser”, which generically describes your company and its highlights. We give the buyers just enough information to get them interested, but not enough to disclose your identity.


Mertz Taggart uses a secure virtual data room to share information with buyers. This gives us the ability to control and monitor access to the company information and report on who reviews it and when.



We systematically create a competitive process designed to ensure we identify the best potential buyers and compel them to present their best offers.

Marketing Phase for Guide to Selling Your Business


Based on our clients objectives, Mertz Taggart will compile a potential list of buyers and/or investors for your approval. We generally work with two types of buyers and investors – strategic and financial.

Strategic buyers seek companies to integrate into their existing operations, targeting businesses that will enhance their presence in different geographic or demographic markets, add to or enhance their product or service portfolio, expand their market share and/or diversify risk. Strategic buyers include both industry buyers (buyers that operate in the same industry, but perhaps in different geographies) and non-industry buyers (buyers that will often share the same geographic footprint, but offer different services up or down the care continuum).

Financial buyers are usually private equity investors or the like (family office, search funds, etc.). Their primary interest is return on invested capital, which they share with their equity investors. They will usually invest in a platform company with the intent to grow, both organically and through acquisition. Holding periods for financial buyers can range from 3-7 years to indefinite.


After we have developed our target buyer/investor universe, we will send out the confidential “teaser” to each prospect, beginning a process of simultaneous selection and deselection of suitors. Business buyers may look at hundreds or thousands of opportunities a year, so this one-page overview document must effectively highlight your company’s strengths and create sufficient interest for a buyer or investor to sign a confidentiality agreement. We are careful not to include details that will disclose which company we are representing.


Interested, qualified buyers will then execute a binding confidentiality agreement, developed by Mertz Taggart. Upon execution, they will receive an electronic copy of the “CIM.” Each page of the CIM will have the recipient’s email address water-marked on the page to mitigate re- distribution and preserve confidentiality.


Within the CIM there will be a process letter outlining the timing of the overall process, including the IOI due date. The IOI is the buyer’s first written offer for your company. The intent of this stage is to gauge each buyer’s interest for the purpose of narrowing the buyer pool down from many to a select few. This weeding out process takes into account not only the buyer’s proposed price and terms, but also less tangible factors such as their fit as a partner or successor for your business, their industry knowledge, and their likelihood of closing.


After receiving IOI’s from the buyer universe, we will select the top bidders for management meetings. We limit the management meetings to a reasonable number (typically 4-8 parties). The first meeting presents an opportunity for our clients to “breathe some life” into the presentation of the business, discuss growth opportunities, and answer questions. It is also an opportunity for a prospective buyer to sell themselves as the right partner. It really is a two-way interview. Establishing trust at this stage is paramount.


A process letter is sent to each finalist either after the management meetings or as part of the invitation to attend the management meeting. This important document serves multiple purposes: It invites buyers to submit an offer in the form of a letter of intent (LOI); it keeps those potential suitors in sync; it reminds them again of the competitive nature of the opportunity; it clearly spells out the terms that should be addressed in the letter of intent.


The process of negotiating the letter of intent and selecting the winning buyer is unique for every transaction, and depends on several factors, including the number of suitors, their respective interest levels and your interest in working with them.  The common message to the buyers is the same...this is a competitive process.  Make your best offer, or risk losing the opportunity.  The end result of this process will be an executed agreement under the best terms possible, with your ideal buyer.


The winning buyer or investor will likely require exclusivity. This will require the seller to take the company off the market for a period of time, while due diligence is conducted and a definitive purchase agreement is negotiated. This exclusivity requirement hinges on the trust that the buyer/investor is sincere and capable, and that the elements of a sale that are important to the seller are addressed in the LOI.



The intent of due diligence is twofold: to confirm the validity of the information that has been shared thus far, and to ensure there are no significant potential liabilities.

Due Diligence Phase for Guide to Selling Your Business


The seller will be given a checklist of items that will need to be provided. We work with our clients to help ensure both a timely and organized response via our electronic data room. Many areas of due diligence can be done remotely, without a site visit, which helps maintain confidentiality and minimal disruption to business operations. However, most buyers will want to go on site at some point in the diligence process. To help maintain confidentiality, most buyers are willing to either perform their on-site due diligence after hours, or under a somewhat factual guise.


Depending on the size of the transaction, the buyer or their lender will often require a “Quality of Earnings.” This usually involves hiring an accounting firm to review the books and create a pro forma financial picture of the company. This is to ensure the revenue and profitability presented in the CIM is valid. In some cases, these firms are incentivized to find opportunities to effectively reduce the reported earnings (and therefore purchase price) of the company. You will want an experienced merger and acquisitions (M&A) firm that can help mitigate this potential issue.



At some point during diligence (and under direction of the negotiated LOI) the buyer will present the initial draft of the definitive purchase agreement. Ideally, you’ve hired legal counsel (we can offer recommendations) at the LOI stage, but it’s critical at the purchase agreement stage to have experienced M&A legal counsel.

The definitive agreement will be significantly larger than the letter of intent, with additional legal-ease around the terms agreed-upon in the letter of intent, and with clauses addressing, among other things, representations and warranties and indemnifications. We will remain actively involved in these negotiations, however the attorneys will control the legal documents as they are updated through the negotiations.



Pulling it all together.

Closing Phase for Guide to Selling Your Business


We always joke that every deal falls apart three times before closing. While that’s not literally true, it does highlight the many challenges that come up during the process. An experienced M&A firm will guide the buyer and seller through an honest dialogue to address any issues that arise. Since most of the work is done in advance, the closing is largely uneventful. At that point, we are simply waiting on the attorneys to finalize documents, get signatures, and have the wire sent!


The attorneys for both parties will handle this. Depending on the complexity of the transaction, the documents may be anywhere from fairly straightforward and simple to very complex. Some private equity transactions might have multiple agreements and add up to over a thousand pages.


The final agreement, once negotiated and executed, is a binding agreement. Signing of the agreements and closing may occur simultaneously, or on different dates, depending on transaction structure, closing conditions, and licensure and regulatory requirements.


A closing condition is a requirement one or both parties need to complete between the signing of the purchase agreement and closing. Most common closing conditions include buyer obtaining licensure, assumption of payor contracts and lease agreements, and, in some cases, public notices.


Congratulations! Time to celebrate!

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