Managing Succession - The Seven Biggest Fallacies

Selling your business - who writes the Information Memorandum?

I have been reading "Local Heros" a book by David Erdal about the employee buyout of theLoch Fyne Oysterbusiness.    I was interested in this book because I drive past the original Loch Fyne Oyster business near Inverary at least a couple of times each year on my way to Oban.   Also because I like the restaurants. 

At one point Erdal describes how, following the death of one of the founders the business was to be marketed for sale.    Of course when selling your business you need a decent document to describe it and present it in the best light.    Erdal reports that the team were surprised how much of there input was required to the document given that they had appointed an Edinburgh firm of corporate finance advisers to help advise on the sale of the company.  

Local heros I was interested in this comment, as it is a reaction I have often come across.   Folk do sometimes expect the adviser to produce a slick document after being given a few random documents.  

 In reality the best sales documents (or information memorandums)  are produced by advisers and management working as a team.  Only the directors can produce the core material to describe the business, however the advisers can work on it to bring out the best points of the business, and to fulfill a vital copy writing and editorial role.    I am often surprised how people underrate some features of their businesses - simply due to over familiarity. 

The lesson is that its important for both parties to understand their roles at the outset.


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