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We believe exploring the opportunity is first;|
and discussing money is last.
Selling your business is a big decision and making sure your employees and customers are well taken care of is a major concern; we know that, and we start there first.
Most people think (are taught) that selling a business is best accomplished by running an auction to the highest bidder – they call it a “process” but it’s really an auction – with all the players focused on “multiples” of your past financial performance, while no one in the process is focused on what really matters; what is the business going to look like after closing and are my people and customers going to benefit, or not? That’s where we are different.
We believe that the most successful deals for all parties start with exploring the “opportunity” first, so that all parties well understand why it is a good idea to make a transaction happen in the first place, well before exploring how, or discussing how much it will cost. By the time everyone better understands the “why” the deal should happen, a measure of reciprocal trust has been established, and after that it is much easier to explore deal structure and purchase price sanely, because both sides can already see the underlying value.
At that point purchase price is fairly simple; how much can the buyer pay and still be a good business decision for them (and how will it be paid matters to both sides), and is the structure and amount sufficient for the candidate company to want to do the deal? That’s where we excel and how our proprietary TAM™ works for both sides.
We don’t think selling a business you care about should be a “battle” in a war of attrition, fought in the trenches by lawyers, accountants and advisors – as many suggest; your business isn’t “property” and you shouldn’t be persuaded to treat it as such. We think that is wrong, on every level; and something we never do.
In our experience, the most successful transactions are accomplished by building reciprocal trust and goodwill from the very first meeting, and throughout the due diligence and documentation process, all the way through to closing and beyond – we think of it more like dating that leads to a successful and lasting marriage. That’s one reason we get more IT Services deals done annually than anyone we know of.
As you can tell from the rest of our website, we are “Buy-side” advisors for IT Services companies throughout the USA (and the rest of the world if they want to buy a company here), who are looking for companies that are a good cultural and operational fit, that can help them grow faster than the pace of organic growth alone. We help them meet companies like you, and we help both of you explore the opportunity. If that goes well there might be a deal to do.
Our clients are under contract with us and they pay us – you don’t (unless you need something special like an MVA) and we are picky about who we work for -- we don’t work for schmucks (which is not the word we’d normally use, but this is a family website). And we believe in the “Cogent-way” so strongly, that we will terminate a client if they can’t do it our way (or, they’ll term us because we don’t do it their way), which is rare, but it happens.
We represent operating IT Services companies large and small (from $5M to $300M) as well as Private Equity firms (“PE”) who invest, all looking for the right company to acquire. Our engagement is designed so that it can be put on “retainer hiatus” while the client is busy working on themselves and not actively seeking immediate acquisitions, and they are otherwise “active” and we are researching and contacting companies like you. This is quite different from sell-side brokers who get paid by YOU to auction-off your company in a process; to companies they don’t have an actual client relationship with. We know all our clients very well.
We know that deciding to actually sell your business is a really big deal. For many, you’re only going to have the opportunity to do this once in your lifetime. Most have no idea what it entails, who to trust, how to prepare, etc.
Some turn to sell-side brokers for advice and representation, and pay lots of money to discover that their business isn’t as valuable as they were led to believe or that the suitors aren’t a good fit, or that they really aren’t ready to sell; an expensive lesson (to be fair, a sell-side broker can actually help you, and they do get deals done; but YOU still have to pay them their retainer and success fee to do so, and that is still expensive. We don’t charge you anything to get a deal done).
Since we already have lots of qualified buyers on our roster, finding a buyer isn’t usually a problem with us. Once you contact us (or you take our call when the Outreach Team contacts you), we always schedule a “Discovery call” with one of our three Partners to learn a little about you, and tell you about us and our clients to see if we have a match already (we don’t share your name with our clients until you agree its ok to do so and NDA’s are signed, and this info in never public in any way regardless).
When we believe we have a good client match, we discuss your company in generic terms – no names – to see if that particular client agrees with our basic thesis, and if so, we come back to you and discuss our client in more details to see if you agree that next steps are warranted. At that point we send you a direct NDA with our client – you get to sign first, so you can approve or reject the client as you see fit – and once signed, we make introductions so that you can have a preliminary call, meetings, whatever you all decide, to see if there is a “spark” and if discussions should move forward or not.
To read more about our process, we suggest you click here and read this portion (or as much as you wish) of the “I Think I’m a Buyer” information on our site , this will help you better understand all the next steps that it takes to get a deal started, negotiated and closed; should you want to make that happen.
The Cogent team does all of the heavy lifting from most of the clients we represent (some of them like to do their own work with an assist from us) and that means we do virtually everything needed to move the deal forward through to closing.
Assuming you already read the “I Think I’m a Buyer” information on our site as suggested at the bottom of the previous “Cogent Way” section, the most important thing to know is that we have a significant stake in the success of the deal, far more than our fee, because our client relationships mean everything to us.
We endeavor to make sure the transaction is a good deal for both sides because we are still going to be working with everyone after the closing. We are not one-and-done brokers that are gone after the deal. We are buy-side advisors who will still be involved afterwards, advising during transition and most likely working on the next one. So, it is very important to us that you are happy after the deal is done.
There is a lot of work to do once you decide to move forward and we help you do so. If you let us, we can help you with gathering/organizing due diligence material as it helps us perform the diligence we need to accomplish; a win-win. Since we author the bulk of the transaction documents, we already know what is in them and how to help you better understand what they mean, and what work needs to be done to complete the schedules and exhibits that go with them; a major component of our value proposition to the deal parties. All of our efforts are intended to make your life much easier, so you can stay focused on running your business throughout the process.
Take a look at what our Sellers have to say about us.
Are you already discussing a potential deal with another company? We can help get it done.
Cogent’s core mission is to help both sides execute a potential transaction while allowing the respective business owners to stay focused on running their business without getting bogged down in the M&A process. If you are already moving forward in a current deal, our services can be packaged as a “project” and we can still help you – from any starting point;
Regardless of your current progress, the Cogent team can still do what we always do for our regular clients by becoming the project manager and intermediary, working in cooperation with the principals (and advisors) on both sides, but doing all the heavy lifting from there. We’ll save you time and money while accomplishing the transaction most likely sooner than without us.
If you are still “kicking the tires” in preliminary discussions, we can engage and jump right in to help.
We’d suggest initiating the preliminary due diligence process, and we’d begin work on our proprietary Transaction Analysis Model (“TAM™”) for both parties in the deal, depending on who is buying whom, or if it is truly a merger. While that is underway we’ll spur myriad planned discussions amongst the deal parties about why these two companies should be combined in the first place, the various ways that might happen, and what the results of such a transaction might look like after closing.
Once completed, we’ll be ready to explore the results of the TAM™ created for each side and work to create a “consolidated pro forma version is needed, all used to create a mutually agreeable purchase price and deal structure that all parties can shake-hands on. (Which is nice. And, we sincerely wish that was all it takes to get a deal done – we really do – but there is a lot more work to do to get a deal closed that also has happy deal parties after closing -- which is our specialty).
As part of our services we most often work with the parties to draft the Letter-Of-Intent (“LOI”)...
and negotiate the granular deal points with the parties, in cooperation with counsel, so that everyone can sign with confidence and be ready to move to next steps. Once the LOI is signed, project management kicks-in to high gear, and we keep the process going.
Generally, we help all parties throughout the entire primary due diligence process – which can be daunting if not thoughtfully managed and executed – and help all parties with general consultation and advice as we draft the myriad transaction paperwork and negotiate the fine points, while also organizing due diligence materials and creating all the resulting briefs, reports and even the transaction schedules and exhibits needed, all as needed for a timely closing. Of course, you can let your other advisors do this work, and you can also do it yourself too, but click here to see what our customers say before you decide.
If you are further along in your current discussions, we’re able to jump in at almost any point in the process:
we can review your material and help you decide if you are getting the best deal or need to do your own TAM™ as confirmatory work, or before responding. Then we can go step-by-step moving forward, parsing the project into phases; each with their own unique statement-of-work (“SOW”) and individual price based on overall deliverables and the various stages of services the deal parties wish us to provide.
but are stuck in a rut, or simply not making timely progress; there are lots of reasons this can happen. We can offer the deal parties the benefit of our experience and help get things back on track, or cut the cord, instead of wasting time in limbo for the wrong reasons. With access to the deal materials, the Cogent team can swiftly make recommendations and create project specific SOW’s designed to help the deal parties make well informed decisions, so that the potential transaction can be concluded with a “pass” or a “closing.”