transition-planning-yumpuu

GUIDE 

SECOND EDITION

LIFE VALUES 

“Wisdom cannot be imparted. Wisdom that a wise man 

attempts to impart always sounds like foolishness to someone else... 

Knowledge can be communicated, but not wisdom. One can find it, 

live it, do wonders through it, but one cannot communicate and teach it” 

- Hermann Hesse, Siddhartha 

DIVESTITURE » SUCCESSION » EXIT PLANNING » SELL 

1.888.859.5388 | www.pavilionservices.com

WHAT’S INSIDE 

The Journey of Life for a Business Owner 

2 

Begin with the End in Mind 

4 

What is an Exit Plan? 

6 

How to Build Recurring Revenue: A Key to a Valuable Business 

8 

Working Together as a Team 

10 

Valuation - Risks & Rewards 

14 

The Pavilion Sale Process 

16 

The Silent Auction Process 

18 

Risk & Rewards 

20 

How Does Pavilion Obtain Extra Value for Each Client? 

22 

It Takes a Team 

23 

Pavilion Factsheet 

24 

Our Values 

25 

IT TAKES A TEAM 

The process of preparing and selling a business is complex and requires a dedicated team 

of professionals. Deal success is dependent on having the right team working together to 

facilitate the sale process. The team players are different on each transaction: 

• Accountant 

• Valuation specialist 

• Merger & Acquisition lawyer 

• Merger & Acquisition specialist 

• Marketing team 

•Wealth management 

Designed and created by Firstbase Business Services (www.firstbase.ca) 

Copyright Firstbase 2016 

TRANSITION PLANNING GUIDE 1

THE JOURNEY OF LIFE 

Have a 

family 

Start a 

business 

Invest 

in the 

business 

Grow the 

business & 

wealth 

Design 

transition & 

estate plans 

GENERATION 1 

MAKE SUCCESSION A SUCCESS 

If you have invested a serious portion of your energy, time and life into 

building and nurturing your business, the choices you make relating 

to who to work with on the last phase of your succession journey can 

make a significant difference. 

This guide details the specific key issues and challenges that can 

increase your final sale price and terms by several million dollars. 

As you begin the journey towards retirement, it is essential to plan a 

head for the best options for all owners and shareholders. 

“ 

Selling a business is a marathon not 

a sprint. A journey that takes careful 

preparation and planning. 

“ 

“Nowadays people know the price of everything and the value of nothing.” 

- Oscar Wilde 

2 

TRANSITION PLANNING GUIDE

FOR A BUSINESS OWNER 

Assign team 

to transition 

business 

Transition 

business 

Decrease 

business 

involvement 

Retirement 

& freedom 

NEW SHAREHOLDERS 

Establish 

a living and lasting legacy 

BEGIN WITH THE END IN MIND 

Planning is essential to enable a successful outcome. As a business 

owner, it’s important to ensure that all the elements are in place to 

achieve the best result. 

Many businesses fail to sell for a variety of reasons: 

• Financial performance 

• High levels of risk and volatility 

• Marketplace conditions 

• Inadequate management team 

This document outlines some of the key aspects needed to consider 

and prepare for the best outcome. 

“ 

“ 

Coming together is a beginning. 

Keeping together is progress. Working 

together is success. 

- Henry Ford 

However good our futures research may 

be, we shall never be able to escape 

from the ultimate dilemma that all our 

knowledge is about the past, and all our 

decisions are about the future. 

- Ian Wilson 

“ 

“ 

“Place a priority on discovering what a win looks like for the other person.” 

- Harvey Robbins 


BEGIN WITH THE END IN MIND 

Planning includes not only when and to whom you intend 

to sell or transition your business, but also ways to maintain 

your company’s value through tax planning and being 

prepared for unforeseen events. Through this process, you’ll 

gain peace of mind that both you and your company are 

ready for transition. 

There are several factors to consider when planning to exit or 

retire from your business: 

• Business partners or key executives 

• Your business plan 

• Your family situation 

• The structure of your company 

• Your retirement plans 

• Tax laws 

• Your health 

• Business debt 

• Market conditions 

Most business owners will only ever sell one business and as 

a result of that will not have the experience of the numerous 

challenges and pitfalls involving finance, legal and taxation 

issues that impact the business sale process and outcome. 

Understanding the value of the business in the open market 

and ensuring the right mix of elements will lead to the key 

objective of maximizing the value on the sale. 

THERE IS ONLY ONE SALE THAT MATTERS 

Despite plans to exit their firms within the next decade, few 

business owners have developed a formal succession plan; 

that could greatly diminish their returns on a business sale. It 

is vital to plan ahead with the exit planning process several 

years in advance to ensure all the key elements are in place. 

In this document there are several sections and chapters to 

be a guide and resource for business owners to facilitate and 

manage the outcome. 

WHY DOES IT TAKE A TEAM? 

Selling a business is one of the most complex transactions 

imaginable and requires a diverse team to enable a 

satisfactory result. Deal success requires having the right 

team on board including: 



• Mergers & Acquisition lawyer 

• Mergers & Acquisitions specialist 


• Wealth Management 

Each of these specialists will play a pivotal role to steer your 

transaction from concept to completion. It is vital that the 

selection process of the team be assessed for their prior 

experience in transactions involving Mergers & Acquisitions. 

An important element to remember is that the buyer 

will have a similar team representing them during the 

negotiation process; therefore selecting the best quality of 

team members will be a determining factor in achieving the 

best value and terms. 

“Insanity is doing the same thing over and over again and expecting a different result.” 

- Albert Einstein 

4 


5

WHAT IS AN EXIT PLAN? 

An exit plan asks and answers all the business, personal, financial, legal, and tax questions 

involved in selling a privately owned business. It includes contingencies for illness, 

burnout, divorce, and even the owner’s death. Its purpose is to maximize the value of 

the business at the time of exit, minimize the amount of taxes paid, and ensure that the 

business owner is able to accomplish all of his or her personal and financial goals in the 

process. 

An exit plan can be complex and usually requires advice from a number of different 

specialties. A well-designed and implemented exit plan enables business owners to: 

• Control how and when they exit 

• Maximize company value in good times and bad 

• Minimize, defer, or eliminate capital gains taxes 

• Retain control by generating a number of strategic exit options 

• Ensure they achieve all of their business and personal goals 

• Reduce their stress and that of their employees and families 

• Ensure continuity of the business 

On the other hand, the failure to create a well-defined exit plan virtually guarantees that 

business owners will: 

• Exit their companies as a result of pressure from outside circumstances, not as a 

result of their own desires 

• Exit their companies on a timetable that’s forced on them instead of one that meets 

their needs 

• Undervalue their companies and leave hard-earned wealth on the table 

• Pay too much in taxes 

• Lose control over the process by being reactive and limiting their exit options 

• Fail to realize all of their business and personal goals 

• Suffer unnecessary psychological stress 

• Watch a lifetime of work disintegrate as a result of poor business continuity planning 

• Lose confidentiality during the sale or exit process 

A recent survey showed the number one reason private business sales fail or only partially 

succeed is a lack of planning on the seller’s part. 

6 



HOW TO BUILD RECURRING REVENUE: 

A KEY TO A VALUABLE BUSINESS 

Recurring revenue is the Holy Grail for business owners looking to have 

a valuable and desirable company. 

A customer base with a subset of recurring revenue that is contractual 

and repeating in nature increases the probability that the business will 

have stable, predictable revenues and cash flow into the future. 

From a buyer’s perspective, this reduces future risk and therefore 

enhances perceived value. The value associated with acquiring the 

available cash flow is directly related to risk. 

Although all recurring revenue will have a positive impact on business 

value, some forms are more desirable than others. Here is a list of the 

types of recurring revenue in an order from good to best: 

CONSUMABLES 

If you sell a consumable product, whether it is diapers, commercial 

cleaning supplies, or office supplies, start tracking your repurchase rate 

from existing customers. This will be a number that buyers will use to 

calculate your projected sales into the future — and to calculate how 

much they’re willing to pay to buy your company today. 

“ 

Recurring revenue is the Holy Grail 

for business owners looking to have a 

valuable and desirable company. 

- Rose Stabler 

“ 

8 


SUBSCRIPTIONS 

Even better than having loyal customers who repurchase is having revenue that is guaranteed into the future. 

For example, loyal subscribers to magazines, newspapers, and other publications get a renewal letter each year 

and pay upfront for the next 12 issues. They make the conscious decision to renew into the future for a certain 

period of time. 

Automatically renewed subscriptions are even more attractive than periodic renewals because they require 

a conscious decision to cancel rather than renew. For example, Mozy.com automatically backs ups office 

computers online on a daily basis and charges a fee each month. This subscription service has no end date 

unless the client tells them to stop providing the service. By tracking historic cancellation rates, revenues can be 

predicted well into the future, which is why these types of revenue streams enjoy higher valuations. 

CONTRACTS 

The only thing more valuable than an automatic renewal subscription is a hard contract for a defined term. 

Wireless cell phone companies come to mind as one of those industries that push hard to get you on a multiyear 

contract. When a company is acquired, the owner and some employees may leave after the acquisition, 

however customers with plenty of time remaining on their contracts are security for the acquirer. As you ascend 

the recurring-revenue hierarchy, the value of the business will go up accordingly. 

RECURRING REVENUE MODELS FOR YOUR BUSINESS 

Do you think that recurring revenue is tough to achieve in your business? Here are some examples of recurring 

revenue models: 

• Maintenance contracts 

• Annual license agreements 

• Warranties 

• Subscriptions 

• Landscape maintenance companies 

• Pool service companies 

• Janitorial companies 

• HVAC companies that perform routine maintenance of 

equipment 

• Accounting firms that provide annual tax return preparation and 

audits 

• Security firms that monitor home and commercial businesses on 

a monthly basis 

• Software companies that provide annual user support and 

software upgrades for a maintenance fee 

BENEFITS OF RECURRING REVENUE 

The recurring revenue customer base you build for your company will: 

• Increase the probability that you will have stable revenues and cash flow 

• Decrease future risk in the mind of a potential buyer 

• Provide you with an opportunity to sell additional products or services to your existing customer base 

• Keep you more attuned to your customer needs while helping you ward off competition 

• Provide a corporate buyer with the opportunity to cross-sell its products to your customers 

• Provide a justification for a higher sales price of your business 

“Ensuring your company has a predictable and stable revenue base will mitigate 

risk in your business and leads to a much higher valuation.” 


WORKING TOGETHER AS A TEAM 

ACCOUNTANTS 

In order to maximize the benefits of the sale value, forward planning is 

essential. It’s important that sellers seek advice from their accountant, 

regarding tax planning or structuring the business for sale. 

When you are planning to exit and sell your business, it usually takes 

between two to three years of advance planning. Advance planning 

is essential to ensure the most effective business corporate structure 

meets with CRA accepted standards that will enable full access to the 

Capital Gains Exemption (CGE). 

Currently the CGE is set at $800,000 tax free benefit for each 

shareholder based on a share sale transaction. However, in order to 

gain access to these tax free funds, the sellers business must meet a 

wide range of criteria in order to achieve a successful outcome. Her e 

are some of the examples of the challenges involved: 

1. The business structure must be “on side” from a CRA perspective in 

order to qualify. 

2. Each shareholder must have held the shares in the business for 

two (2) years prior to selling the business to a third party. 

3. The business model must pass the buyer scrutiny of “due 

diligence” and only when the buyer is satisfied that the risks 

involved in the purchase of the business will they consider a share 

sale. If the risk is unacceptable to the buyer, then they will proceed 

with an Asset sale that doesn’t have the same tax free benefits. 

4. If the business has a track record of any substantive legal action, 

then this illustrates risk to the new buyer and will probably result in 

an Asset sale. 

There are a wide range of issues involved when selling your business 

that are impacted by the sellers accounting records, for example: 

Every business has to pay taxes, but a solid tax strategy will help your 

client pay what’s fair. There are two possible scenarios, Share Sale or 

Asset Sale. 

While a Share sale is the obvious preference, often business 

circumstances dictate that buyers will only consider an Asset sale. 

“ 

“ 

Where there is no guidance, a 

people falls, but in an abundance of 

counselors there is safety. 

- Proverbs 11:14 

Opportunity is missed by most people 

because it is dressed in overalls 

and looks like work. 

- Thomas Edison 

“ 

“ 

“The difference between failure and success is doing a thing 

nearly right and doing it exactly right.” 

- Edward Simmons 

10 


DOES YOUR BUSINESS MEET THE LOW RISK CRITERIA 

THAT BUYERS SEEK? 

• A consistent trend of increasing sales and profits over many years 

• Dominant market share in its trade area 

• A diversified customer base 

• Excellent receivables management 

• Good banking credit and payables history 

• Low employee turnover 

• More than adequate working capital 

• Financial ratios compare favourably with other industry averages 

There is a wide range of issues involved when selling your business that 

are impacted by your accounting records, for example: 

Every business has to pay taxes and developing a solid tax strategy 

will help your client pay what’s fair. It’s important to plan ahead for a 

tax efficient strategy with your client. There are two possible scenarios, 

Share Sale or Asset Sale. In many circumstances, providing your 

client with a Review Engagement process carries more strength and 

substance than Notice to Reader. 

While a Share sale is the obvious preference, often as a result of the due 

diligence phase, the clients business circumstances dictate that buyers 

will only consider an Asset sale because of high perceived risks. 

“ 

Without advice plans go wrong, but with 

many advisors they succeed. 


“ 

SERVING OUR CLIENT’S BEST INTEREST 

Pavilion has acted for many respected businesses to structure 

and execute significant corporate financial merger & acquisition 

transactions in the small / mid-cap marketplace. 

The advantages of working with Pavilion include: 

• Access to objective advice, professional insight and judgment 

• Strategic partner that keeps the clients best interests in mind 

throughout the transaction 

• Essential market intelligence both locally, nationally and globally 

• Maximize the transaction value 

• Access to pre-qualified investors and strategic buyers 

It’s a fact, Pavilion has the skills, talent and know-how to negotiate and 

achieve a significantly higher selling price than any other organization. 

Working together to serve the 

common purpose of the clients goals. 

“The great accomplishments of man have resulted from the 

transmission of ideas and enthusiam.” 

- Thomas J. Watson 


LAWYERS 

Legal issues are always at the forefront of M&A deals. The lawyer is a 

very important advisor to both Seller or Buyer. The lawyer should be 

someone who is well versed in M&A; only use an attorney who has 

actually engaged in M&A transactions. 

Buying and selling a business is one of the most complex transactions 

that exist in the marketplace today. It’s a complicated process with 

multiple concurrent moving pieces in the transaction that effect: 

• Taxation matters relating to the CRA 

• Human Resources and Employment Contracts 

• Real Estate – Sale or Lease 

• Trusts 

• Deal / Transaction Structure: Share Sale or Asset Sale 

• Terms of Payment: Vendor Financing, Earn Outs and other 

conditions 

• Purchase / Sale Agreement 

“ 

“ 

“ 

There is gold and abundance of costly 

stones, but the lips of knowledge 

are a precious jewel. 


Earnings can be pliable as putty when 

a charlatan heads the company 

reporting them. 

- Warren Buffet 

Rule No.1: Never lose money. Rule No.2: 

Never forget rule No.1 

- Warren Buffet 

“ 

“ 

“ 

“Proficient is defined with one word: skilled. In order to become skilled you must 

have more than knowledge, you need to apply that information.” 

- Jac Fitz-Enz 

12 


WEALTH PRESERVATION 

While every business has to pay taxes, a solid tax strategy should help 

to pay what’s fair. There are many aspects to consider to prepare a 

clients business for transition planning, including: 

• Wills 

• Trusts & Corporate Structure 

• Estate Planning 

• Tax Strategies 

In many instances, either accountants or lawyers are key proponents of 

best practice in this regard and help structure the clients’ tax strategy 

–and enabling more revenue toward their bottom line. 

“ 

And if anyone forces you to go one mile, 

go with him two miles. 

- Matthew 5:41 

“ 

MERGERS & ACQUISITION - IT TAKES A TEAM 

The lawyers for both sides (buyer and seller) work together and craft 

the details of the purchase agreement. 

These agreements are very complex and often utilize complex terms 

and phrase and it’s a key responsibility to craft a document that think 

makes sense, protects the clients interest and not cause the transaction 

to collapse. 

The lawyer selected must specialize in Mergers & Acquisitions 

transactions and will help resolve the following issues: 

• Assisting with a transaction strategy; 

• Conducting due diligence on legal matters; 

• Drawing from previous mid-market M&A transactions, in order to 

provide the owner with some comfort and reassurances as to: 

o The process that the owner will undergo; and 

o What types of problems and concessions are customary in 

similar circumstances? 

CORE COMPETENCY 

The primary role of the lawyer is focused on negotiating the legal terms 

of the purchase agreement. Lawyers are worth their weight in gold 

providing they are proactive and assist in protecting their clients best 

interest and enable a successful outcome. 

Lawyers – during the sale process of every transaction, an experienced 

M&A lawyer will play a key role in determining and facilitating the key 

components of the final Purchase Agreement. 

In most cases, it is the buyers’ lawyer who drafts the Purchase 

Agreement and it will be weighted in their favour. Selecting a lawyer 

who is specializes in Merger and Acquisition services and is aware of 

the unique language and aspects of these complicated transactions is 

essential. 

The lawyer is there to protect the clients best interests and often will 

save their client unnecessary taxes and post closing costs. 

“ 

A negotiator should observe everything. 

You must be part Sherlock Holmes and 

part Sigmund Freud. 

- Victor Kiam 

“ 

If you are considering selling your 

business with the plan of being out 

in 3 to 5 years, the best time to strart 

the process is today 

“ 

“ 


VALUATION - RISK & REWARDS 

IT’S ALL ABOUT VALUE 

Pavilion has a team of highly qualified professionals who utilize various 

methods for conducting valuations. 

We recognize that a sound valuation will be based on all the relevant 

facts including the elements of common sense, informed judgment 

which must enter into the process of weighing those facts and 

determining their combined or cumulative significance. 

“ 

The value of a thing is the amount of 

laboring or work that its possession 

will save the possessor. 

- Henry George 

“ 

In addition, Pavilion has further resources that help smaller and midcap 

clients optimize their current “fair marketplace” value. 

INTERNAL VALUE DRIVERS 

Our team works closely with sellers to assess the business internal 

“value drivers” that ultimately determine the Enterprise Value in the 

marketplace. In addition, we utilize real time access to the following 

resources: 

4 Precedent database of completed transactions across North 

America that provide evidence to support the valuation. 

4 Real time access to the financial performance in each SIC or 

Industry sector to enable an independent “yard stick” for key 

performance indicators (KPI’s). 

4 RMA Ratio’s – The Risk Management Association provides a wide 

range of metrics that we use to assess the business and provide a 

“score card”. 

The true indicator of a company’s success is measurable by a wide 

range of factors. One of the main components is the financial metrics 

of the business including the Profit and Loss statements and Balance 

Sheet performance. While this is a key financial metric, there are 

numerous other factors that enhance enterprise value. 

“ 

4. 

Normalization of financial statements and 

assesment as to future maintainable earnings 

2. 

Risk Profile 

(internal/external) 

7. 

Valuation 

Conclusion 

6. 

Transaction reviews 

including the number of 

buyers and sellers 

market sector 

5. 

Application of valuation 

approaches and methods 

3. 

Future Opportunities/ 

Growth Potential 

1. 

Collection and analysis of all relevant information 

necessary to support the valuation conclusion 

Everything that can be counted does not 

necessarily count; everything that counts 

cannot necessarily be counted. 


“ 

14 


MORE THAN EBITA 

EBITA plays a significant contribution to the business valuation 

however there are multiple other factors that can make a considerable 

difference to the outcome. 

Today, up to 80% of a firm’s value can be associated with intangible 

assets, such as brand, reputation, culture, customer satisfaction, human 

capital, risk management, R&D pipelines and a company’s trading 

license to operate. 

“ 

There is gold and abundance of costly 

stones, but the lips of knowledge 

are a precious jewel. 


“ 

EXTERNAL VALUE DRIVERS 

When taking your business to market, it is important to consider the 

external value drivers: 

• Economic factors 

• Strategic buyer synergies 

• Recurring revenue 

• Competition from buyer groups 

• Innovation & IP: proprietary technology, trademarks, patents, etc 

• Transition timeline for existing management 

Each of these factors can substantially increase the final selling price for 

the benefit of the seller. 

IT’S COMPLICATED 

Selling a private company is not just about finance, accounting or legal 

matters. It is a team effort that is dependent on sales and marketing to 

ensure the best value. 

A marketing strategy is critical to the sale process primarily because it 

will enable multiple bidders for the sellers business which will ensure 

they obtain maximum value for your clients’ years of hard work. 

AVOIDING THE PITFALLS 

Traditional approaches for selling a business involves little sales or 

marketing activity. There is an over reliance on “word of mouth” and 

networking connections from third party advisors. As a result, the client 

often does not achieve optimum price, value, or terms - referred to as a 

“short sale”. 

“ 

“ 

We are in danger of valuing most 

highly those things we can measure 

most accurately, which means that we 

are often precisely wrong rather than 

approximately right. 

- Sir John Banham 

Money, which presents the prose of life, 

and which is hardly spoken of in parlors 

without an apology, is, in its effects and 

laws, as beautiful as roses. 

- Ralph Waldo Emerson 

“ 

“ 

“If you are considering selling your business with the plan of 

being out in 3 to 5 years, the best time to start the process is today” 

TRANSITION PLANNING GUIDE 

15

“ 

THE PAVILION SALE PROCESS 

The successful sale of a business involves many moving parts, making 

it the largest and possibly most complicated transaction of your life. 

The Pavilion process ensures practical advice that will help you select 

the best professionals to sell your company while ensuring that you 

get the best price and terms. 

It’s often possible to sell your business for 50% more value if you 

do everything right. Unlike selling a home in the residential or 

commercial real estate market, the process of selling your business is 

deemed “inefficient” for a myriad of reasons. 

The purchase price for your company will vary greatly depending on 

who you are selling to and what type of buyer you are looking for. 

For example, Pavilion utilizes a dedicated marketing team who 

specializes in researching niche and vertical markets to identify 

strategic buyers from around the Globe. Strategic buyers will often 

pay a premium for your business. 

“ 

It’s complicated 

EFFECTIVELY STRUCTURING YOUR COMPANY 

FOR TRANSITION 

When you sell your business you may face a significant tax bill, if 

you’re not careful, you could find yourself with less than half of 

the purchase price in your pocket. Fortunately, there are multiple 

opportunities to reduce or even eliminate tax, with the right 

preparation and enough time to implement. 

The moral of the story? Structure your company well in advance of a 

potential sale and reap the benefits; or fail to plan ahead of time and 

pay the price – literally to the CRA. 

Our team has substantial experience in establishing proactive tax 

planning practices to mitigate your taxes, so that shareholders take 

full advantage of your enterprise value benefits. 

Whereas in the M&A market, 

the selling and marketing 

process itself can have a 

major impact on the price 

of your company. Plan and 

execute the process correctly 

and you could increase the 

price of your company by 

upwards of 50%. 

16 


HOW DOES PAVILION ATTRACT MORE 

BUYERS? 

The Pavilion team works closely with our marketing 

agency Firstbase Business Services (www.firstbase.ca). This 

relationship provides the basis for our strategic advantage. 

Firstbase is an international strategic marketing agency 

with an exceptionally talented team to provide “best value” 

solutions for clients. 

Our marketing strategies are unique and comprehensive, 

when we implement the marketing program, we invariably 

have a significant level of high quality enquiries for each 

unique business enterprise we represent. The result is obvious 

very quickly – a higher level of qualified buyer enquiries based 

on our geo-demographic targeting initiatives. 

ABOUT FIRSTBASE 

Established in 1985, Firstbase was founded by Greg Spafford 

in 1985 in the UK and the business was a founding member 

of the Direct Marketing Association. The basis for success is 

that geo-demographic targeting enables precisely targeted 

messaging to niche and vertical markets. This expertise 

enables the selection of the most appropriate audience for 

specific messages to target business audiences around the 

globe. 

Unlike other indiscriminate media including newspapers, 

magazines, radio and television; targeted messaging ensures 

the message being delivered that the audience is relative. 

The result is higher levels of engagement and response 

based on accurate targeting. 

TARGETED RESULTS 

TARGETED RESULTS 

1. The Project Brief 

230 

25 

5-10 

5-7 

3 

2 

1 

1. The 2. Exhaustive Project Brief Research 

2. Exhaustive 230 prospective Research purchasers 

230 prospective purchasers 

3. Prospect Generation 

3. Prospect Generation 

25 interested parties “Dry-run” 

25 interested parties “Dry-run” 

negotiation negotiation training training 

4. Qualification 

4. Qualification 

& Bidding 

& Bidding 

5-10 exploratory meetings 

5-10 exploratory meetings 

5-7 Competitve 

5-7 Competitve 

bids 

bids 

3 Bids 3 worth Bids worth considering considering 

2 Alternatives maintain competition 

2 Alternatives maintain competition 

5. Concluding 

5. Concluding 

the 

the 

Deal 

Deal 

1 purchaser 1 purchaser 

“The great accomplishments of man have resulted from the 

transmission of ideas and enthusiam.” 

- Thomas J. Watson 


THE SILENT AUCTION PROCESS 

Due to our proactive marketing programs, we generate more 

buyer enquiries than anyone in our industry. The result, increased 

competition between buyers enables us to negotiate higher sales value 

and improved terms for the client. 

INFORMATION AT OUR FINGERTIPS 

We have access to a database of buyers from around the world 

including: 

• Venture Capital firms 

• Private Equity Groups 

• Strategic Buyers with selection by industry category, sales revenue, 

etc. 

• Comprehensive database of most companies in USA and Canada 

• International buyers including: China, Europe, Middle East, and 

Australasia 

The Benefits of the Silent Auction: 

• Pavilion generates a wide range of buyers for each listing and 

operates the silent auction process. 

• Bidders are coached through the bidding to negotiate the best 

price and terms. 

• The result is a higher sales value and improved terms for our client. 

Pavilion comprises of a dedicated M&A specialists who have the skill 

set, know-how and experience to enhance and improve the final selling 

price by as much as 50% over any other firm in the USA or Canada. 

WHY DOES COMPETITION FROM BUYERS 

INCREASE YOUR SALE PRICE? 

The purchase price for your company can vary greatly depending on 

who you are selling to and what type of buyer you are looking for. The 

team at Pavilion market your business under the radar and in stealth 

mode while managing the complexity of a confidential sale process. 

“ 

You only have to do a very few things 

right in your life so long as you don’t do 

too many things wrong. 

- Warren Buffett 

“ 

An expert is a man who knows some 

of the worst errors that can be made 

in the subject in question and knows 

how to avoid them. 

- Thomas Stewart 

“ 

“ 

“If you know what you are talking about you have something 

more valuable than gold or jewels.“ 


18 


MAXIMIZE THE VALUE OF YOUR BUSINESS 

Selling your business is a complex process that requires thorough 

preparation, skillful presentation of your company, identifying the right 

buyers, and sophisticated negotiation skills. 

At Pavilion, you’ll work with a senior member of our team. We will 

work closely with you to prepare your business for sale, present your 

company to a highly targeted group of national and international 

buyers and work with you to negotiate a transaction that meets all of 

your objectives. 

Your Pavilion advisor will guide you through each step of the sales 

process, help you solve every challenge, be your advocate throughout 

the deal, and leverage our firm’s years of experience to successfully sell 

your company for maximum value and on the best terms. 

By preparing your business for a voluntary sale, you can build a 

sustainable operation that will attract both strategic and investment 

buyers who will pay a premium for your business enterprise. 

“ 

There really is only one sale that matters 

to your business: your final sale. The one 

where you exit. Your brand, your culture, 

your reputation, your revenue - they all 

culminate in that one big transaction. 

So while you’ve got to be thinking 

about your revenue numbers every 

quarter, you’ve also got to be building a 

business that creates value. Ultimately, 

you’re going to capture that value 

if you do it well. 

- Razor Suleman 

Director of software company 

Achievers, which sold for $110 Million 

“ 

INTERNAL VALUE DRIVERS 

4 Stable and predictable cash flow 

4 Reliable financial information 

4 Customer diversity 

4 Human capital / quality of workforce 

4 Growth potential 

4 Facility and equipment condition 

4 Product / service diversity 

4 Goodwill 

4 Barriers to competitive entry 

4 Operating systems and procedures 

EXTERNAL VALUE DRIVERS 

4 Economic factors 

4 Strategic buyers synergies 

4 Reccuring revenue 

4 Competition from buyer groups 

4 Innovation & IP: proprietary technology, trademarks, patents, etc. 

4 Transition timeline for existing management 

“ 

The only source of knowledge 

is experience. 


“ 

“Those who fail to acknowledge and adapt themselves to the digital 

revolution will become the “Kodak“ of this industry.“ 

- Aakash Educational Services 


RISKS & REWARDS 

RISKY BUSINESS – AVOIDING THE PITFALLS 

Some advisors don’t like to talk about risk. They’d much rather talk about 

howmuch money you’ll make when their advice produces positive 

returns, overlooking the potential that a collaboration with an M & A 

specialist can provide. 

WHAT CIRCUMSTANCES LEAD TO A SHORT- 

SELL? 

Many advisors are seeking to diversify their revenue streams and enter 

the Mergers & Acquisitions arena. In many instances, because business 

owners have worked closely with advisors for years or decades, they are 

of the opinion that the advisor is able to sell the business in the most 

effective manner. 

The final sale result is underwhelming, the advisors’ firm sells the clients 

business to the best of their ability however, the outcome results in a 

lesser sum than the business enterprise is worth. 

Without collaboration from other advisors with more knowledge of M & 

A, millions of dollars can be left on the table resulting in a short-sell. 

IT’S ALL ABOUT VALUE 

The Pavilion approach to valuation is comprehensive and distinctly 

different than any other advisor. Primarily because, we review the 

strategic combined value and multiplies it, offering maximum return for 

the client. 

A sound valuation will be based on all the relevant facts including the 

elements of common sense, informed judgment and rationally which 

must enter into the process of weighing those facts and determining 

their combined or cumulative significance. 

“ 

CAUTION & RISK 

Traditional approaches for selling 

a company involves little sales or 

marketing activity, resulting in a 

short sale for the client. 

There is an over-reliance on word of 

mouth and networking connections 

from third-party advisors that 

fail to deliver a sale structure and 

offers that are in the best interest of 

the business owner. 

“ 

20 


REWARDS 

Pavilion has acted for many respected businesses to structure and 

execute significant corporate financial transactions in the mid-cap 

marketplace. The advantages of working with Pavilion include: 

4 Access to objective advice, professional insight and judgment 

4 A strategic partner that keeps our best interests in mind 


4 Essential market intelligence both locally, nationally and globally 

4 Maximize the transaction value 

4 Access to pre-qualified investors and strategic buyers 

It’s a proven fact, Pavilion has the skills, talent and know-how to 

achieve a significantly higher selling price than any other organization 

in Western Canada. 

AVOIDING THE PITFALLS 

What is the difference between a company that is sold versus bought? 

It’s a fact that most business owners will only sell one significant business in their lifetime. The process of selling 

a business is complicated with many concurrent moving parts. Selecting the right partner in the selling process 

will make a significant difference in the outcome, as outlined below. 

CASE STUDY 

In a recent example, a mid cap business owner worked closely with their highly reputable top tier advisors for 

over 15 years. When the owner was ready to sell, the advisors conducted a valuation and stated that they could 

sell the company for an estimated value of $12 million. After a year on the market with no success, the business 

owner approached Pavilion. 

Pavilion conducted a new valuation, which determined the business was actually valued at nearly $20 million. 

With Pavilion’s innovative marketing initiatives, the business gained interest from prospective buyers and within 

8 months, the right buyer was found. 

Target enterprise value 

Other Advisors 

$12 Million 

The Pavilion Team 

$19 Million 

Number of bidder enquiries 29 

132 

Shortlisted bidders in negotiation 5 

19 

Highest bidder $ 9.5 Million $16.5 Million 

$7Million 

Difference in sale value 

The bought company had significantly more buyer enquiries and resulted in more 

competition and enabled an improved outcome for our client. The Pavilion fee 

was paid for many times over and the client got the increased value they deserved 

for their years of hard work. 


THE BIGGEST DEAL OF YOUR LIFE 

- ARE YOU READY 

You’ve worked hard, risked your money and done your time. Now 

you want to reap the fruits of your labours and sell your business for 

maximum value. Since you will only do this once, you want top dollar, a 

crisp closing and a binding transaction. Consider these points: 

WHEN TO SELL 

The only time to sell is when somebody wants to buy. It sounds simple, 

but the in today’s notoriously cyclical marketplace, there are times when 

values are low or buyers are scarce. The best timing is when investors 

and markets perceive future growth. 

Value your business to leave the new owner some upside. We agree that 

you want the highest price, but like any transaction the buyer wants the 

best deal and confidence that profits are sustainable and that growth 

will continue. 

To successfully complete the deal, the new owner must be confident that 

your business will generate a satisfactory return on investment. 

FINANCIAL CONSIDERATIONS 

Accurate and comprehensive financial statements are essential. The 

company’s value will be based entirely on the formal presentation of its 

financial performance. Often companies don’t sell because they can’t 

present verified and timely statements and credible forecasts. Ensure 

your asset list and inventory is complete, detailed and current. An 

independent asset and business valuation will be required. If you don’t 

have tight financials and you’re considering selling, invest now in better 

processes and reporting. It’s that important. 

OPPERATIONS 

Unless you’re selling to senior management or to a competitor, you 

must be able to demonstrate continuity of the business. If you want 

to retire or sell your business soon, groom a successor. This will attract 

investment buyers, like private equity groups, who aren’t interested in 

actively participating in the day-to-day management of your company. 

22 


LEGLAL MATTERS 

It is vital that your enterprise is not currently engaged in litigation that 

will adversely affect the financial performance of your company. A clean 

legal track record is far more preferable than one that is embroiled in 

legal disputes. 

CONFIDENTIALITY 

Maintain absolute secrecy. Most private businesses operate and feel like 

extended families with high levels of personal loyalty from staff. Even 

a rumour that the owner is preparing to sell is disruptive. Only discuss 

the sale with your team when you are certain that the deal will 

close. 

HEALTH AND SAFETY MATTERS 

Health and Safety is no longer a secondary consideration for the 

successful operations of your business. Business owners who put the 

workplace safety of their employees as a priority benefit in a number of 

different ways including reduced injury rates and higher productivity. 

Businesses that take the initiative to prevent accidents have one quarter 

or lower injury rates than competitors who do not. These organizations 

understand that a superior health & safety program leads to: 

• lower costs; 

• improved employee relations and employee trust; 

• improved reliability and productivity; 

• improved protection from business interruption; 

• increased public trust and improved public image; and, 

• increased organizational capability 

Increasingly, clients with a poor safety record are less attractive from a 

buyers’ perspective. You’ll need a Workers Compensation Board account 

that’s not onerous. Some buyers will be put off and less likely to acquire 

your business if your safety performance is substandard. 

OTHER CONSIDERATIONS 

Be prepared for intense investigation and many questions. Many 

owners over estimate what potential buyers know about their 

enterprise. The process will be time-consuming and most likely will also 

be frustrating, but it is an essential part of the process. 

Consider staying involved to enhance value or expand the scope of 

potential buyers. Maximum value will be assigned only if the new 

owners are confident the business will continue and grow. Options 

include a partnership with the new owners while you groom your 

replacement or an “earn out” by which you share in some of the future 

risk. 


HIRE AN EXPERT ADVISOR 

To ensure your information package is complete and the sale contract 

is fair and binding; and to reach the greatest number of potential 

purchasers (including outside of Canada), hire a qualified Merger and 

Acquisition Specialist. The expenses associated with the expert help will 

be a fraction of a higher valuation and sale price. 

Consider professional advice on the biggest sale of your life as an 

investment, not an expense. 

CONTENDER OR PRETENDER 

There are many types of professional advisors with specialist skills and 

knowledge for their specific business areas including highly esteemed 

accountants, lawyers, bankers and investor firms. However, these 

organizations specialize in their respective fields of practice and often 

dabble or pretend to have the know-how to properly execute the sale of 

a business. 

While some professionals in other fields may even have some experience 

in selling businesses; the truth remains that they don’t have the same 

skill set or expertise as a dedicated and focused Merger and Acquisition 

Specialist. 

CHOOSE WISELY 

There will be others who will no doubt be able to “sell your company” 

– however these “pretenders” will be unable to create and deploy a 

marketing plan to attract bidders from around the globe to achieve the 

highest selling price for the Biggest Sale of Your Life. The results of 

choosing the wrong professional will ultimately lead to a lower selling 

price that benefits the new owner and doesn’t reflect your hard work and 

sacrifice. 

24 


WHAT SHOULD I DO BEFORE SELLING 

MY BUSIENSS? 

For many business owners, the hardest part is not locating a buyer or 

structuring terms of the deal, but it is discovering what they will do the 

day they hand over the keys and walk out the door. 

When you started your business, the objective may have been to be 

independent, to put your creativity to work, or to have the freedom to 

discover your own way. You probably also had a vision of your ideal 

business: You put your money down and took your chances. You 

invested all your time, money and energy, sacrificing weekends and 

reinvesting your profits. You may not have realized it, but somehow 

along the way you started to build the business around your strengths. 

As the business grew, it was about more than the money; it became 

your identity. In fact, you may now have a hard time imagining a 

personal vision for your future without the business. 

When you look at your net worth, you may have already reached your 

“number” – meaning the sum you need to live comfortably throughout 

retirement. However, you stayed in the business, possibly because your 

“number” changed to enhance your lifestyle or you were afraid to stop 

working. You could not visualize your life without the business. Maybe 

it was never really about money at all: your business showcased your 

strengths and gave you purpose. 

Now, after spending your lifetime developing your creation, you are 

thinking about selling. What will you do next with your time, strengths 

and knowledge? What will become your new focus? 

DEVELOP A CLEAR VISION OF WHAT YOU 

ARE GOING TO DO NEXT 

Many people start the process of selling their business without thinking 

about what they will do once it is sold. This results in anxiety about 

abandoning the structure, social environment and security the business 

has provided. Anxiety can also cause you subconsciously to sabotage 

your efforts to sell your business. You can reduce your anxiety by 

developing a clear vision of “life after” that will pull you into the future 

with a new passion and purpose. 

Before you take the next steps to sell your business, start writing your 

next life chapter using the same process you used when you started 

your business. Develop a vision of what you want to do, one that is 

fuelled by your natural strengths and passions and is not driven by 

financial reward. 

“ 

Being the richest man in the cemetary 

doesn’t matter to me... Going to bed at 

night saying “We have done something 

wonderful,” that’s what matters to me. 

- Steve Jobs 

“ 

Dost thou love life? Then do not 

squander time, for that’s the stuff 

that life is made of! 

- Benjamin Franklin 

“ 

“ 


What gets you excited? Develop an inventory of your personal strengths 

and social needs. Reflect back on what you have enjoyed the most 

during your life. What would you like to spend more time doing? What 

sacrifices did you need to make to achieve business goals? What 

did you always want to do, but could not do, because of financial 

responsibilities or other obligations going as far back as your youth? 

We find many clients choose not to stop working after they sell their 

business. They apply their strengths and passion to new adventures 

that do not have income as their primary aim. Most clients travel for 

pleasure at this time and some continue to earn money part-time, 

but only if it is “fun”. Others choose new professions, while many start 

new business ventures in a more leisurely way. Some former business 

owners apply themselves to charities that support their values. 

Before you start the process of selling your business, develop a clear 

vision of what you are going to do next. It will give you the confidence 

to take the next step in your life. 

NEVER DO THIS ALONE 

Planning to exit from your business should also form an integral part of 

your estate and retirement plan. Planning and implementing various 

strategies will enable you to transfer your business to your family, your 

employees or an outside buyer. It also provides you the opportunity to 

maximize your financial return and minimize your tax liability. 

Most business owners will 

only sell one business. As 

a result, they will not have 

experience with legal matters, 

tax issues, selling factors 

and financing pitfalls that 

will significantly impact the 

value they will realize on the 

business sale.. 

The transition to exit your business in a timely fashion and in a manner 

of your choice should be seen as a process and not an event. This can 

best be achieved with a team of professionals working together towards 

a common goal. Proper planning provides an opportunity to protect all 

the hard work and sacrifices for the achievements you have made. 

Understanding the value of your business in the open market, ensuring 

the appropriate blend of financing, putting in place tax structures, legal 

and M&A advice are all essential to being objective and maximizing the 

value of the sale. 

Ensure there is a proper management structure, business processes, 

and a team of people running the business without the owner. This will 

enhance the attractiveness of the business to potential buyers. 

Most business owners will only sell one business. As a result, they will 

not have experience with legal matters, tax issues, selling factors and 

financing pitfalls that will significantly impact the value they will realize 

on the business sale. 

Remember, this is a team effort involving financial planners, 

accountants, lawyers, M&A advisors – a team that will enable you to exit 

your business in the way you want. 

“ 

All the world’s a stage, and all the men 

and women merely players. They have 

their exits and their entrances; and one 

man in his time plays many parts. 

- William Shakespeare 

“ 


27

DOES YOUR BUSINESS MEET THE 

LOW RISK CRITERIA THAT BUYERS SEEK? 

Every business organization has risk elements. Business risk implies uncertainty in relation to profits or danger of 

loss and unforeseen future events which cause businesses to fail. 

Due to the continuous change, rapid obsolescence, and an uncertain economy, certain risk factors of buying the 

wrong business become greater than ever before. Any buying decision that represents uncertainty triggers the 

feeling of risk that threatens security. Here are some buyer considerations: 

4 A consistent trend of increasing sales and profits 

over many years 

4 Dominant market share in its trade area 

4 A diversified customer base 

4 Excellent receivables management 

4 Good banking credit and payables history 

4 Low employee turnover and no union 

4 4Financial ratios compare favourably with other 

industry averages 

4 A diversified group of products or services 

4 Relative insulation from increased competition 

4 No unprotected hidden liabilities 

4 Strong management and competent staff 

4 And all kinds of upside potential 

4 More than adequate working capital 

If your business passes on each key point, then the probability of a successful sale is much higher than other 

businesses that do not meet all of the criteria. 

DON’T BLOW THE BIGGEST DEAL OF YOUR LIFETION 

Here are the cold hard facts about trying to sell your own business and what you can expect during the sale process. 

Fact One: 

Every seller knows a buyer 

Fact Seven: 

Sellers think it’s easy to sell their business and 

Fact Two: 

Most sellers overvalue their business or don’t 

it’s expensive to use a broker 

know the true value at all 

Fact Eight: 

Buyers will often pose as legitimate, however 

Fact Three: 

Sellers are not experienced or prepared for the 

sale process 

they will sometimes seek to obtain your 

supplier and client lists, then set up in 

competition 

Fact Four: 

Buyers will take advantage of the seller 

Fact Nine: 

Most sellers leave substantial amounts of hard 

Fact Five: 

Buyers will leak information and undermine 

earned $$ on the table due to inexperience 

the sale process 

Fact Ten: 

Sellers often try to sell the business themselves 

Fact Six: 

Sellers underestimate the complexity of the 

sale process 

which results in failure or they don’t achieve 

the maximum sale price and/or terms 


29

EXIT PLANNING AND 

PREPARATION FOR SALE 

The Pavilion team has extensive experience in the transition 

and exit planning process to help you plan, prepare and achieve 

maximum value for your business, including: 

EXIT PLANNING PREPERATION 

4 Short, medium and long term exit planning 

4 Comprehensive evaluation of current business position, and 

formulating a complete strategic plan ready for exit 

4 Analysis of key areas of the business, and full preparation of each 

area ready for sale 

4 Exit options analysis, explanation and planning with owners/ 

shareholders (and board of directors, if appropriate) 

4 Identifying applicable third party requirements, such as lawyers, tax 

professionals, etc. 

4 Impartial advice and resolution of complex business matters or 

disputes relating to sale 

4 Professional, detailed business valuation 

4 Structured planning and guidance for each step of preparation for 

sale 

4 Maximizing sales value and ensuring a smooth process from start to 

finish 

30 


THE BUSINESS SALE PROCESS 

4 Project managing every step of the process, from initial preparation 

right through to completion 

4 A focused approach and custom solutions for each client 

4 Complete evaluation of each option available, and guidance on 

which route to take 

4 Controlling negotiations to maximise the deal success and value; 

including preliminary verification of the buyer’s ability to complete 

the purchase 

4 Managing the due diligence process, including performing a 

‘dummy-run’ due diligence to identify any issues that require 

resolution before sale, in order to maximize sale value 

4 Expert market research to identify potential credible buyers, 

shortlisting the ‘top’ buyers who would be a strategic fit 

4 Creating thorough, high quality sales and marketing information, 

including a comprehensive and powerful Memorandum of 

Information 

4 Maintaining complete confidentiality with all parties; incorporating 

legally binding confidentiality clauses and full non-disclosure 

agreements 

PAVILION BUSINESS SERVICES - MERGERS AND 

AQUISITIONS “KNOW HOW” 

Our comprehensive professional services include: 

4 Helping you to formulate, implement and execute your merger and 

acquisition strategiesr 

4 Robust and professional business valuations 

4 Project managing every step of the process, to ensure a smooth 

transaction 

4 Comprehensive research for merger and acquisition opportunities 

4 Facilitating the initial approach, handling negotiations and 

ensuring the structure of the deal is optimized 

4 Securing funding to support the merger or acquisition 

4 Management Buy-Outs (MBO) & Buy-Ins (MBI) 

“ 

Protect yourself from costly mistakes 

and blunders 

“ 


In addition, we also help facilitate and implement: 

4 Strategic planning and implementation of MBOs and MBIs 

4 Advising management teams on all aspects of the MBO/MBI, and 

ensuring they are fully prepared 

4 Assessing the feasibility of the MBO or MBI 

4 Project managing the process, to ensure the management team 

can continue running the business 

4 Preparing effective, professional business plans 

4 Appraising funding options available and securing funding to 

facilitate the MBO or MBI 

4 Controlling sensitive negotiations to ensure the right price and 

terms are agreed, and alleviating any potential conflicts of interest 

THIRD-PARTY SALE 

Pavilion Business Services Maximize the Value of Your Business 

Selling your business is a complex process that requires thorough 

preparation, skillful presentation of your company, identifying the right 

buyers, and sophisticated negotiation skills. 

At Pavilion Business Services, you’ll work with a senior member of our 

team. He or she will work closely with you to prepare your business for 

sale, present your company to a highly targeted group of national and 

international buyers, and work with you to negotiate a transaction that 

meets all of your objectives. 

As your merger and acquisition specialist, your Pavilion 

Business Services advisor will guide you through each step 

of the sales process, help you solve every challenge, be your 

advocate throughout the deal, and leverage our firm’s years 

of experience to successfully sell your company. 


33

CHOOSE THE RIGHT M&A SPECIALIST 

TO HELP SELL YOUR BUSINESS 

If you are ready to get serious about selling your business, then you 

should consider retaining a M&A Specialist to help out. A M&A Specialist 

is experienced in buying and selling privately-owned businesses; there is 

a lot they bring to the process, including: 

• Experience 

• Expertise 

• Confidentiality 

• Determination to make a deal happen 

• Objectivity 

THE BENEFITS OF USING A M&A SPECIALIST TO 

HELP YOU SELL YOUR BUSINESS 

There are a number of great reasons to use a M&A Specialist to help 

you sell your business: 

4 Benefit from the experience of someone who has done this before 

4 Obtain an objective assessment of what you have to sell and what it 

might be worth 

4 Assess when the best time would be to sell your business 

4 Support to approach potential buyers while keeping your identity 

hidden 

4 Qualify potential buyers, so you don’t waste your time with 

scavengers, tire-kickers or curiosity-seekers 

4 Develop and implement a plan to bring enthusiastic, multiple 

buyers to the table 

4 Support to deal with multiple potential buyers at the same time 

4 Leave you free to run the business 

4 Team approach during the negotiating process, or you can stay 

completely in the background if you prefer 

4 A third-party that can ask questions that may be difficult for you to 

ask 

4 Experience negotiating business terms, including price, 

non-competition covenants, deal structure, payment terms, 

management contracts, security and other critical matters. 

4 Support from other professionals into the process, including 

accountants, lawyers, business valuators and other consultants 

34 


USING A M&A SPECIALIST TO HELP YOU SELL 

YOUR BUSINESS 

Every M&A Specialist has their own way of doing things. However, a 

typical process could include: 

Retaining the service: This is usually done by way of an exclusive, 

written agreement for a fixed listing period, often twelve months. Fees 

are usually structured on a commission basis, but may include: 

• A non-refundable and minimum fee up-front, which pays for the 

consulting services and value you will receive even if you ultimately 

decide not to sell; and 

• A commitment or understanding of how expenses will be covered, 

including advertising, marketing, travel, printing and similar thirdparty 

payments or disbursements. 

Commissions: Commissions are usually based on a percentage of the 

consideration received, and are calculated on the total purchase price, 

no matter how it is paid, including debt assumed, consulting fees and 

similar forms of vendor compensation. Commissions are usually paid on 

closing and in cash equivalent funds. 

THE BUSINESS SALES CYCLE 

1Business valuation 

Preparation of marketing 

2 strategy and materials 

Marketing campaign to attract 

3 investors / buyers 

4 

Buyer 

5 

Negotiate 

qualification 

the best value 

Completing a business review: After your listing or representation 

agreement is in place, your M&A Specialist can work with you to 

complete a review of the business opportunity you have to sell, 

including what you are selling, why, how valuable it might be, who 

likely buyers might be, and what can be done to improve the value or 

marketability of the business. This review can include a financial review, 

inspection and cataloging of assets, and assessing and summarizing 

important assets or relationships, which are valuable to a potential 

buyer. 

Preparing Briefing Materials: You and your M&A Specialist are also 

likely to work together preparing briefing materials for potential buyers. 

These materials often include: 

• A business valuation that determines current fair market value. This 

document is to establish the basis for the listing price. 

• A short (1-2 page) profile letter that can be distributed to potential 

buyers, sometimes called a “teaser”, which keeps your identity 

anonymous. 

6 

Close 

7 

Succession 

the deal & successful sale 

& exit 

• 20-30 page confidential business profile that provides more detail to 

qualified buyers after they sign a Confidentiality Agreement. 

• A preliminary due diligence package, which will include the core 

information a buyer needs to develop a price, financing and due 

diligence strategy, but does not contain the level of detail which will 

be required for final due diligence to verify the assumptions which 

form the basis of the initial deal. 

The goal of the plan is to 

locate multiple, enthusiastic 

buyers for your business. 


Preparing a Marketing Strategy and Plan: This will include a sales 

process and timeline, marketing strategies (advertising, anonymous 

solicitation by the M&A Specialist, non-anonymous solicitation of key 

potential buyers), and a list of potential buyers to be contacted. 

Implementing the Marketing Plan: Your M&A Specialist will then 

implement your marketing plan. All expressions of interest are referred 

to the specialist, who will then work to bring the most qualified buyers 

for you to meet and consider. 

Negotiating the Deal: In the end, you and your team will identify the 

most likely buyers and the M&A Specialist will assist you in negotiating 

a deal. This part of the transaction will include making sure you have 

a buyer who is “for real”, turning over the preliminary due diligence 

package and answering questions arising from it, and getting an 

agreement on all the main business points (including price, financing, 

terms, conditions and restrictive covenants). The M&A Specialist will 

be very involved in this stage of the transaction and should be your 

primary advisor. 

Initial Deal Document: The essential deal points are typically 

negotiated in the course of drafting and redrafting a proposed term 

sheet or Letter of Intent (LOI). Some of this document is binding – 

confidentiality provisions, disclosure provisions and lock-up terms, for 

example. 

Buying or selling a business is 

not something you should try 

to do by yourself. Most owners 

only buy or sell a business 

once or twice in their careers. 

However, most of the document is non-binding until final due diligence 

is completed – including price, payment terms, special conditions and 

third-party approvals. The M&A Specialist is normally very involved in 

working on this document, and may even be the party responsible for 

drafting, and redrafting the document as required. Your lawyer and 

accountant may be involved too. 

Due Diligence and Definitive Agreement: After the “hand shake” 

document, the lawyers usually put together a definitive agreement of 

purchase and sale closing documents and work on legal due diligence, 

while the parties and their advisors, including accountants, work on 

completing all business and financial related due diligence. 

In most deals, the agreement of purchase and sale is not signed until 

the actual closing date. However, on some deals – smaller ones or deals 

with special circumstances – the agreement of purchase and sale can be 

done instead of the Letter of Intent, or will be done right away after the 

deal memo or Letter of Intent are completed, but before closing. 

In any event, the M&A Specialist is usually not very involved in the 

details of process, although they have an important role to play and can 

add significant value in assisting with communications and helping to 

mediate if difficult issues arise. 

Working with an experienced 

professional who buys or 

sells businesses every month 

and who protects your 

confidentiality can improve 

your chances of success and 

reduce the risk of something 

going terribly wrong. 


37

HOW DOES PAVILION OBTAIN EXTRA 

VALUE FOR EACH CLIENT? 

Due to our proactive marketing programs, we generate more buyer enquiries than anyone in our industry. 

The result, more competition means we are able to negotiate better value and improved terms for our clients. 

MOTIVATED BUYERS 

IMPROVED NEGOTIATION OUTCOME 

THROUGH MOTIVATED BUYERS 

FAIR MARKET VALUE RANGE 

MOTIVATED SELLERS 

BUYER WITH STRONG 

NEGOTIATION SKILLS 

A MYRIAD OF BUYER CATEGORIES 

We have access to database of buyers from around the world 

including: 

• Venture Capital firms 

• Private Equity Groups 

• Strategic Buyers with selection by industry category, sales 

revenue, etc. 

• Comprehensive database of most companies in USA and 

Canada 

• International buyers including: China, Europe, Middle East, 

and Australasia 

“Invest in truth and wisdom, discipline and good sense, and don’t part with them.” 


38 


“ 

IT TAKES A TEAM 

The process of preparing and selling a business for sale is complex and 

requires a dedicated team of professionals. Deal success is dependent 

on having the right team working together to facilitate the sale 

process. 

KEY TEAM MEMBERS 

The team players are different on each transaction: 

“ 

Without advice plans go wrong, but with 

many advisors they succeed. 


“ 



• Merger & Acquisition specialist 


• M&A lawyer 

TEAM WORK 

Each of these team players will play a pivotal role and need to work 

collaboratively with each other at different stages in the sale process. 

The Pavilion team works with clients to facilitate the sale process in the 

following manner: 

• Maximize their client’s value 

• Minimize their risk 

• Support an effective and efficient transition 

At Pavilion, we believe in teamwork and don’t displace the client’s 

existing professionals. 

SERVING CLIENTS BEST INTEREST 

Pavilion has acted for many respected businesses to structure 

and execute significant corporate financial merger & acquisition 

transactions in the small / mid-cap marketplace. 


Working together to serve the 

common purpose of the clients goals. 

• Access to objective advice, professional insight and judgment 

• Strategic partner that keeps the clients best interests in mind 


• Essential market intelligence both locally, nationally and globally 

• Maximize the transaction value 

• Access to pre-qualified investors and strategic buyers 

It’s a fact, Pavilion has the skills, talent and know-how to negotiate and 

achieve a significantly higher selling price than any other organization. 

If you are interested in collaborating together, we would be pleased to 

hear from you. 

“ 

Unity is strength. . . when there 

is teamwork and collaboration, 

wonderful things can be achieved. 

- Mattie Stepanek 


PAVILION FACTSHEET 

OVERVIEW 

Pavilion Business Services is an independent Mergers & Acquisitions (M&A) 

advisory firm operating and serving Canada’s small to mid-cap market. 

Pavilion provides specialized advice to management teams of publicly and 

privately-owned businesses. Pavilion’s team of experts is comprised of M&A 

Specialists, Business Consultants, Succession Planners, Valuation Experts and 

Marketing Specialists. Our team provides advisory services in the areas of: 

• Succession / exit planning 

• Mergers & Acquisitions 

• Raising capital 

• Business valuations 

• Corporate restructuring 

• Business growth strategies 

Pavilion specializes in working with companies and organizations with 

typically $2 million – $500 million in annual revenue. 

CORPORATE INFORMATION 

• Serving clients across Canada 

• Attracting strategic and investment buyers across the 

globe 

• Financial analysis specialists 

• Access to domestic, national and international markets 

• Skilled and experienced negotiators 

INTERNATIONAL BUYERS 

Pavilion’s extensive networking partners allow us to provide 

business advice on an international scale with direct access 

to buyers and investors in over 120 countries. We work with 

professional equity, strategic buyers and investment firms 

from USA, Europe, Middle East, China and Australia. 

North America is increasingly being regarded as the 

preferred location for business investments. Established 

businesses with a solid cash flow are in huge demand from 

buyers around the world. 

ADVANTAGES OF WORKING WITH A 

MERGERS & ACQUISITIONS ADVISOR 

Pavilion has acted for many respected businesses to 

structure, negotiate and execute significant corporate 

financial transactions and has successfully completed 

numerous transactions in the mid-cap market space. 


• Access to objective advice, professional insight and 

judgment 

• A strategic partner that keeps your best interests in mind 


• Essential market intelligence both locally, nationally and 

globally 

• The ability to maximize transaction value based on our 

experience and track record 

• Access to pre-qualified investors/buyers 

PHILOSOPHY 

The Pavilion management team instinctively know that great companies are built on the principle of doing the right thing each 

and every day, and treating business partners, customers, and employees honestly, fairly and with respect. 

KNOWLEDGE » INTEGRITY » RESULTS 

40 


OUR VALUES 

dedication 

innovation quality 

entrepreneurship 

excellence 

sustainability 

teamwork accessibity 

integrity 

collaboration 

honesty 

openness 

persistence simplicity 

transparency aware 

empathy 

OUR MISSION 

In partnership, we build trusting relationships with individuals, business owners 

and organizations to provide strategic exit planning and transition services. 

“Do not use harmful words, but only helpful words, the kind that 

build up and provide what is needed, so that what you 

say will do good to those who hear you.” 

- Ephesians 4:29 


With vision and imagination, 

we sell your business for maximum value. 

(Image of Pavilion Business Services’ reception area) 

42 



DIVESTITURE » SUCCESSION » EXIT PLANNING » SELL 

1.888.859.5388 | www.pavilionservices.com

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