7-21 Capital Group is more than a buyer; we are your partner. The relationships we build with business owners like you are integral to who we are and how we do business. We will work with you every step of the way. We seek to understand your current situation in order to understand how we can contribute to the growth of your company, the legacies of its leaders, and the impact on its community.
Whether contact is made directly, via our website, or through an intermediary, we welcome the opportunity to meet with you for the first time. The initial contact phase is the ice-breaker intended to open dialogue about the possibility of doing business with you.
BUILD A PARTNERSHIP AND SHARE INFORMATION
Having found a mutual interest, we want to get to know you better. We want to understand you and your company inside and out. Using a confidential information memorandum, we will ask for specifics about your company. We fully expect to sign a non-disclosure agreement to protect your proprietary information.
INDICATION OF INTENT (IOI)
The purpose of an IOI is to provide you with our expectations regarding the potential price range of our offer. Before either of us invest further time and resources on the other terms and conditions of the offer, the IOI outlines a general price expectation upfront.
LETTER OF INTENT (LOI)
Though there may be initial negotiations and expectations discussed prior, the LOI begins the negotiation phase in earnest. The LOI codifies our initial assessment of the company and contains the important terms of our initial offer. It will include items such as the purchase price, the amount and terms of seller debt, any business assets not included in the sale, the amount of working capital delivered at closing, the length of post-sale noncompeting, and potentially other important items. The LOI will also include an exclusivity period, giving both sides further assurances of our mutual commitment.
The LOI ensures there is mutual understanding on key terms before either party commits significant resources to due diligence and other work required that moves us toward a purchase agreement and deal closer.
CONFIRMATORY DILIGENCE AND REVIEW
With a signed LOI, we enter the due-diligence phase of the process. This is when professional services such as accountants, lawyers, and other specialized experts perform third-party assessments of the business on our behalf. This is also when we want to begin engagement with your customers, suppliers, and employees through interviews.
Once third-party assessments and interviews are complete, we will review the feedback against our assessments of the company framed in the LOI to determine if any require renegotiation leading to the purchase agreement.
We estimate this phase to take at least 30 days.
As the due diligence process moves along, we will begin drafting the purchase agreement, building on the framework of the LOI. The agreement will capture all the items of the LOI in more detail and include any new items that have arisen during the due-diligence and renegotiations. This phase can be tedious and require more work from both of us.
CLOSING, TRANSITION, AND BEYOND
With the review, signature, and assembling of the agreement documents, they will be held in escrow until they are all completed and we’ve reached the agreed upon closing date. With that, we begin the transition.
We will include negotiated transition plan expectations as part of the purchase agreement to help ensure a smooth transition of the company to our ownership, securing your legacy, and ultimately bringing the process to a close.