17/09/10

By Eddie Harding, Lead Adviser, ICON Corporate Finance

For most entrepreneurs the sale of their company is a significant and potentially life changing event. It is also, however, a field in which they have little or no experience. For anyone looking to achieve the most from their exit, here’s a list of ICON’s top tips for optimizing your company’s exit value.

1. Ensure your business processes and records are in good shape well before the transaction process starts. Preparing well before you embark on a sale can save a lot of time and awkward questions during the due diligence stage.

2. Appoint professional advisers who have the experience and style that suit you.

3. Tidy up any potential shareholder issues before commencing the sale process.

4. Be open, honest and straight with prospects. Selling a business can take time and you must build trust to ensure a successful outcome.

5. Confidentiality is vital. Ensure Non Disclosure Agreements (NDAs) are signed to protect your IP.

6. Make it competitive. Push for a simple deal structure, and make sure it is well documented in your prospective purchasers “letter of intent” (LOI).

7. Maximise up-front cash, and minimise any earn-out or lock in periods.

8. Don’t take the eye off the day job, selling, delivering, managing.

9. Don’t select your buyer based on value alone, make sure structure, synergies and chemistry are right if you have to continue working in the business during any earn out phase.

10. Keep the proposed level of integration or interference to a minimum if there’s an earn-out — negotiation never stops..

ICON advised John Summers, CEO of RF Engines, on the sale of his business to major European defence contractor Rheinmetall AG.. John will be sharing his exit experience with other CEOs and NEDs at ICON’s Exits Masterclass on Thursday 7th October 2010, giving practical advice to the leaders of high growth tech companies looking to achieve the optimum exit.

Speaking alongside John will be Ashley Ward, who led the IPO of Orchestream in 2000 to its £1billion market cap and has successfully managed 2 large exits to both Intel and Cable and Wireless.

ICON is an award winning firm of corporate finance advisers that acts exclusively for companies and management teams in high growth technology sectors. ICON help companies throughout the key stages of their business transactions: selling companies, raising venture capital funding and corporate finance strategy. www.iconcorpfin