Sell-side advisory

Our value proposition in a sell-side process

A sell-side mandate is one of the more common situations for retaining Keystone Advisers in which the firm takes the full project management responsibility of the whole divestiture process.
The sell-side projects can be described as going through four phases:

1. Preparations
2. Buyer contact
3. Due diligence
4. Negotiations leading to signing and closing of the transaction.

The process itself is a critical and often underestimated value driver. In our view, the combination of professional process management and the creation of competitive tension in the process will deliver maximum value potential to the sellers. In general terms, a divestiture process is usually handled in one of two basic forms:

Controlled auction: a confidential process where 4-30 potential buyers are contacted and the initial information distribution is conducted via written material, e.g. an information memorandum. After an indication of interest, access to management presentations and further due diligence is provided to a limited number of selected parties.

Negotiated process: one or a few buyers that are regarded to be best suited for a transaction are contacted for a confidential process; sometimes a dialogue may already be initiated. Information distribution is handled more directly, e.g. through management presentations. Negotiations and price indications are requested relatively early along with confirmatory due diligence.

There are plenty of variations of these two basic process forms as all process strategies are tailored individually to the situation and the client’s wishes. Furthermore, mergers and joint ventures are special situations that require us to work closely with both parties during the whole process.

Key process parameters when deciding on the process strategy are the seller’s view of the most attractive transaction outcome and structure, the number of potential buyers, knowledge and rationale of the most suitable buyer as well as degree of information distribution.

In our experience, success of a sell-side mandate is achieved through hard work, strong project management, continuous reporting and dialogue as well as clear areas of responsibility. Keystone Advisers always works in close cooperation with the owners, board of directors and management team as well as other advisers.