Selling a company is a complex transaction. Below, we clarify the most common doubts:

How is my company valued?
There are many methods to value a company, but three are the most frequently used:
Discounted Cash Flow (DCF). Using the WACC (weighted average cost of capital) reduction rate, method that deducts at the current date the expected future cash flows. This is the main method, very reliable, and also the most technical and difficult to obtain.
Multiples. This method uses the company quotations in the same industry and extrapolates the equivalent multiples quoted (PER, Ebitda and Sales) to the referred company. This is probably the easiest method.
Comparable Transactions. It identifies the deals done in other companies in the same industry or activity, and it extrapolates the calculated ratios to our company. This is a complicated method because of the little information published in the media, but it’s quite reliable and realistic. 

Who could buy my company? 
Not always our competitor is the best buyer. Frequently the buyer is a company that wants to enter into our industry or country in order to grow, diversify, or other strategic reasons. Additionally, the Chief Executive Officer (CEO), or an executive from another company could also acquire our company, financed by investment funds specialised on these kind of transactions. In this case it would be a MBO (Management Buy Out) or MBI (Management Buy In). 

Which are the key points to maximize the value of my company 
There are a series of factors that increase the interest of a buyer or investor in my company: income statements easy to understand and verify, realistic forecast, proper account balance, transparency in the information, continuity of the second line of management, high commitment of the CEO, prestige in the market, own technology and know how, growing sector. 

How is the negotiation process? 
A company sale is a long and complicated process. There are many people involved from both sides. During the selling process a huge amount of business and legal information is managed, about the recent history, the present and the future of the company.
This is the phase where a lot of deals fail because of the tiredness of parties, loss of trust and sometimes due to lack of objectivity or little experience in managing the process. 

The role played by the management team while the company is being sold 
The management should be focused on the daily business, because in this period is when the consistency of results are more relevant as it can build trust to the buyer or loose it. The chief executive should participate during the sale in the explanation of the accounts and projects of the company in the most objective way possible.This should only happen when his presence is required.
Only if the manager participates in the operation as an investor or seller should be involved in the process, but separating very clearly both roles. 

How to preserve the confidentiality of the sale process 
This is a real challenge even within the same company, with the employees. The question is... at what point this can harm the company, and what is the reaction of the responsible people to the fact that the situation is known.
In any event, unforeseen leakage are reduced or minimized if the sales process is handled professionally and managed with the required experience to tackle these projects. 

How to assure the confidentiality with the buyers 
In addition to confidentiality agreements duly edited and signed by the buyer, it is important to make contacts at highest level and with the appropriate protocol.
Sometimes can be convenient to agree indemnity clauses for the potential buyer in case of breach. 

What information should we provide to the buyer who wants to invest in the company 
First, it depends if the buyer is a competitor or not. Second, it depends on the reliability and trust we have in the potential buyer, as well as its experience in this type of process. 
If it is a competitor, at first we must not give him any information that would endanger the confidentiality of our products and customer's/clients information. The first information delivered is very important since it will mark the rest of the talks and negotiations. That is why it must be coherent, thoughtful, tidy and very clear. If the buyer is not a competitor, the process is easier, we should be as open and transparent as possible and reasonable, generating greater credibility and interest. 

What criteria should I have in choosing a good adviser 
The M&A firm has to be: specialized, experienced, independent and with good references. The cost, which is also important, should be secondary to the first criteria (within reason), taking into account the outcome of process normally overcomes the possible difference in the initial cost. 

How much does it cost the adviser 
The professional companies specialized in this services it is usual a fixed monthly retainer during the first six months of the contract plus a variable rate based on the total amount of the final sales transaction. This percentage can range between 3% and 5% in middle market transaction (5 to 100 MM Euros). It also depends if the deal is geographically simple or complicated.

How is the selling process of the company 
The sale of a business is a long process in which buyers and sellers want to obtain the best conditions from the other party. The seller seeks the highest price, and the buyer wants the lowest price. Due to the fact that there is a lot of information to be analysed  and several teams involved from each side, it is important to be well prepared and try to make the process as easy and as smooth as possible.
Most of the processes of buying and selling companies are not successfully closed. It is for this reason, among others, that you must evaluate and think carefully what outcome you are seeking, and choose who to do it with.
In these processes a great deal of time and energy is invested, because of their relevance and significance. If you are successful, the reward is high. If you are not, the disappointment is high too. 

What is the value my company 
My company is worth the amount that a buyer is ready to pay for it. That is the only real value of the company. In addition there are methods that allows us (as indicated above),to establish a rational approach to what may be a market value. 

How to value the shares that provide the majority of the company 
The share that provide the majority of the company have an extra premium. This premium is normally calculated based in OPAS that have been made in the stock market during the last year. It fluctuates depending on the company, sector, country and economic times. A normal reference range of the premium might be between 25% and 35%. 

How to raise capital from a financial investor 
The first step would be to develop a good business plan, which reflects as much as possible the reality of the company. Second, we need to set the basic parameters on what kind of operation we are looking for: minority stake, majority stake, capital requirements, approximate value, type of investor, time horizon, etc.. Third, unless in my company there is someone with the ability, time and expertise in this subject, retain an external consultant to lead the project. The investment in this resource is usually profitable and increases the probability of success. 

What things shouldn't be done in order to sell the company ? 
The owner should never manage the transaction directly.  
Avoid giving insufficient information, too complex to understand, or unclear to your advisors.
Asking for a price a price that is too high. You should aim for the realistic maximum. Not more, not less.
Speak to the market without a single voice, with a message that is organised, timed, and planned. If the information is misinterpreted by the market, it will hurt the company and the transaction.
Contact in the buyers company someone who has no decision-making power (very usual in China, as lines of command are sometimes unclear).

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