Topic 13
Seller's Prospectus
Aprospectus, or selling document, is required as part of the process of engaging in an auction. Sellers and their bankers collaborate in the preparation of this document. Bankers provide the format and outline, and sellers provide the description of the business, market, customers, competition, operations, and so forth, and the technical background. Bankers provide the financial and transaction information, value proposition, and position the business opportunity and write the document.
CONTENTS OF THE SELLING DOCUMENT
- The seller's prospectus is a selling document prepared by the seller and/or the seller's banker. The primary function of the prospectus is to present the compelling story and attributes of the target's business model.
- The compelling story should start at the end user level and run through the target's internal fulfillment chain. Readers must find credible, testable resonance with the rationale presented in support of the financial outlook provided in the document, such as:
- End user market drivers that support unit volume demand growth (evidenced by regulatory requirements, demographics, technology replacement trends, supply imbalances, and so forth)
- Served market share drivers (evidenced by price leadership, low-cost leadership, innovative/unique solutions, competitive advantage, customer surveys, performance, and so forth)
- Competitive advantage (deriving from proprietary technology and know-how; relative quality, delivery, and solution ...
