Management presentation before a company sale
Management presentation is defined as the first meeting where the prospective buyer is interacting with the management team of the company in person.Typically the meeting is initiated by the company owner and his or her management team before the actual negotiations will take place. During the meeting, the management team will promote the merits of the business and all answer any queries which the potential buyer may wish to ask. The presentation gives the business owner the opportunity to interact with the buyer and ask the buyer any questions they may have regarding due diligence of the company, the processes before the sale, and after the sale, and the vision the buyer has for the company. The owner can use this opportunity to develop a rapport with the buyer and get more information about the buyer.
Management presentations are usually scheduled after the company receives the expression of interest (EOI) from a particular buyer. The company can receive EOIs from different buyers. The duration of the presentation may vary from a few hours to the entire day. The goal of making the presentation is to receive a price offer from the buyer which exceeds the price expectation of the seller. After meeting different buyers, the seller will also try to select a buyer who can finalize the deal and make all the payments, within a reasonable period of time.
Typically the formal management presentation will include a update on the financial status of the business and a reports on the sales which are in the pipeline, order backlog so that the buyer is aware of the business revenues and future growth prospects. The assumptions which are used by the seller for making the financial projections are also reviewed and explained to the buyer. Some of the information which is provided in the meeting, would typically also be included in the confidential information memorandum ( abbreviated as CIM) to the buyer. However, the management will use the formal presentation to showcase some of the key points of the company, which are relevant to the buyer. The seller can also provide details of any new developments related to the company business, which took place after the CIM for the company was prepared and submitted to the buyer.
Most buyers will prefer to deal with a business owner who will ask them questions during the company management presentation. Asking questions indicates that the business owner is involved in the sale, and would like to find a buyer who will match the company profile and culture. Most buyers will conduct a due diligence of a company before they purchase it, so that they pay the right price. The management presentation is considered to be the preliminary part of the due diligence of the company by the buyers since it gives them information about the capabilities of the management team of the company they wish to purchase. It will also provide information about the work culture, mindset of the top management of the company, which sometimes affects the deal finalization.