Accelerated disposal programmes

It is sometimes critical to evaluate a business’ strategic options quickly before any trading or financial pressures build which may ultimately restrict those options. In such circumstances, an accelerated disposal process is often relevant either because the vendor needs to realise proceeds quickly or because the business itself is stressed and any delay risks a further deterioration in trading and consequent value loss.

Given these pressures, Gazelle has developed an accelerated disposal process which is designed to place minimal burden on management in the early stages but allows a vendor to know how strong the appetite is for a business within 4-6 weeks of initiation, thereby minimising the period of stakeholder uncertainty and management distraction.

In addition to understanding the value proposition, the vendor can also form a view on the certainty and speed of execution of competing offers, as minimising time to completion can be critical to avoid any softening in trading (which may otherwise cause acquirers and/or financiers to reassess terms).

In contrast to a formal auction process, the information memorandum is sacrificed in favour of a short-form document with appended management account highlights and/or forecasts. Interested parties are agreed and approached early-on to exchange confidentiality agreements, allowing the marketing materials to be dispatched.

Thereafter any issues arising with interested parties are clarified with a view to securing indications of interest within 2 weeks of exchange of confidentiality agreements. Once expressions of interest are received, the vendor can then assess whether there is merit in moving to a more intense phase of diligence and management meetings, leading to the selection of a preferred party to conclude the transaction with.

Gazelle’s focus on non-core disposals and experience in leading disposals of troubled assets has enabled us to develop and tailor processes which are designed to maximise terms for our clients. Our accelerated disposal process continues in this tradition and offers business owners a further option in assessing the right strategic action to take in the current environment.