If you’re looking to sell, it’s critical you attract the right buyers with a detailed yet concise overview of your firm.
The M&A transaction “teaser” is the first document that a prospective buyer will review about your firm. This document is designed to make the sale process simpler and more efficient by attracting the right potential buyers while screening out irrelevant ones.
Strategic buyers typically review hundreds of acquisition opportunities each year and buy approximately 1 to 2 percent of them. For an AEC firm owner or CEO looking to successfully sell their business, this places a tremendous emphasis on the quality of the offering materials.
- Don’t forget to include the basics. Buyers should have a clear understanding of the firm after reading through the teaser. Include:
- How the firm generates revenue
- When the firm was founded
- Number of full-time employees and any details about second-tier leadership
- Services offered and markets the firm operates in
- The general background of the management team
- Overall financial profile: three years of historical revenue/NSR and EBIT/EBITDA and at least two years of projected revenue and EBIT/EBITDA
- Three to five transaction highlights that discuss the unique strengths of the firm (e.g. market share leader, three-year historical review, growth of 15 percent or more, management experience, etc.)
- Clearly define the transaction objectives. What is your goal for this transaction? Prospective buyers will appreciate firm owners who are upfront about their reasoning for wanting to conduct a transaction. This type of behavior builds a level of trust between you and any buyer(s) you decide to engage.
- Keep it concise and professional in appearance and tone. It’s best to keep a teaser to one full page in length, which will ensure every word is adding value.
- Always use a professional font (e.g. Arial or Calibri).
- Send the teaser as a PDF file.
- Avoid using flowery language and hyped-up adjectives to describe your firm. These hurt your credibility.
- Double and triple check for grammar issues and spelling errors.
- Keep it anonymous. Never disclose the name of your firm or any identifying information in the teaser.
- Every teaser must clearly answer the following question: What is the source of your firm’s competitive advantage? The core of your firm’s value is tied to how sustainable its competitive advantage is. Competitive advantage dictates your firm’s ability to generate, maintain, and grow revenue over the long-term. Prospective buyers will use this outlook as the basis for their estimation for your firm’s valuation.
A teaser provides a bird’s-eye view of your firm, and gives a potential buyer an overview of your firm’s history, financials, and desired transaction. The goal of a teaser is not to sell your firm, but to pique buyers’ interest to find out more.
Noah Hunt is a consultant with Zweig Group’s M&A services. Contact him at email@example.com or at 479.856.6244