The M&A Seller should circulate a written agenda. Keep it simple: roughly five to eight items. Although specific agendas vary from deal to deal, a management meeting should generally include the following aspects:
Introductions: The whole point is to get to know the other side, right?
Buyer’s discussion: Buyer introduces himself, talks about his company or fund, his investment strategy, and his reasons for pursuing this particular Seller.
Seller recap: Seller provides a simple reminder of what she’s seeking to do (sell 100 percent or some other amount of the company), whether she’s amenable to structuring (including an earn-out, note, and so on), and whether she prefers cash at closing. If a selling owner is interested in staying on board after the sale, she should communicate that at this time as well.
Seller-owned real estate isn’t part of an offering document, so if Seller is open to selling the real estate, she should mention that at this juncture.
Opportunities for the buyer: This section represents the thesis from Seller’s offering document, updated if necessary or appropriate. Listing some of Seller’s key strengths — recognizable brand name, revenues, profits — isn’t a bad idea.
Recent improvements or changes: Think of this section as Seller’s brag-and-tout section, where she can discuss any pertinent updates, such as new systems that have improved margins, changes in the inventory techniques, new customers, better terms with vendors, or anything that’s an improvement or change from the offering document.
Financial update and forecast: In this part of the meeting, Seller provides Buyer with updated post-offering document financials and gives guidance on future financial results.
In other words, are the projections in the offering document holding firm, does Seller think the company will actually be more profitable, or is the company failing to achieve the projected results? If the company isn’t achieving its projections, Seller should be able to discuss why the company’s financials are falling short of plan.
Additional opportunities for Buyer: Typically, these items are post-sale opportunities for Buyer. Although convincing Buyer to pay for improvements he’ll bring to the company is difficult, showing him how the benefits that may accrue after closing helps him understand that the future prospects of the company are solid. After all, if Buyer believes the future is bleak, he probably won’t proceed with a transaction.
Q and A: A good meeting should allow at least two hours for a question and answer session. During the Q and A, Buyer usually takes the lead and asks Seller a lot of very difficult questions, although Seller can certainly return the favor as well.
Notice the flow of this agenda. The meeting starts with the basics, segues into the benefits Seller can offer Buyer, provides updated information and a forecast, and then addresses where Buyer will be able take the business. In other words, the meeting gets the basics out of the way first, thus clearing the table for where you want the discussion to go: doing a deal.
Seller should maintain strict control over the interaction between Seller’s staff and Buyer. The employees may not know about the pending deal, and if Buyer starts calling employees to ask questions, the cat will be out of the bag. Also, Seller’s employees don’t work for Buyer yet, so Seller needs to guard against Buyer wasting the employees’ time with question after question.