Buy Process
Acquisition process
Looking to expand your reach by buying a business? Here’s what to expect when working with MCA to buy a business.
1. Initial Valuation
We run an initial valuation and report by having the target take a 10-minute questionnaire through this link:
https://getcubed.com.au
Based on the answers to the questions, each business is scored out of 100 in each of the key Value Driver areas. These results are compared to over 50,000 businesses with similar attributes, with a focus on those of a similar size from similar industries. The outcome is a valuation multiple and price range dictated by their basic financial inputs.
At this stage, we will prepare a report for the client highlighting the strengths, weaknesses and value range.
This initial valuation is generally accurate within 10% and allows us to have a discussion about the range you would be prepared to pay, subject to Step 2 and Due Diligence. However, there can be limitations. These limitations usually apply to future high-growth businesses. This method under-values them by not as effectively taking account of future cash flows as a detailed, individual business-centric Discounted Cash Flow analysis.
This process provides an exact number to negotiate (either prior to or post Due Diligence, as desired), again subject to due diligence.
2. Letter of Intent
You and the target sign a non-binding Letter of Intent, including agreement on key contractual clauses and mechanisms.
3. Due Diligence
You proceed to Due Diligence and renegotiate as necessary if any discrepancies or concerns are highlighted.
4. Contract of Sale
You have a Contract of Sale prepared, negotiated and executed.
*We can oversee and negotiate any, or all, of Steps 2-4 as required.