Sell-side

The seller side, known in professional terminology as the sell-side, refers to advisory work on the seller's side of a transaction. Advisors organise the sales process, approach buyers, and negotiate the terms. Their goal is to achieve the best price and the best conditions for the seller.

The scope of work begins long before outreach: preparing the figures and deriving an adjusted result, developing the investment case, producing the teaser and information memorandum, building the data room, selecting and prioritising the buyer list, and choosing the process architecture between a broad auction, a limited process and bilateral outreach. Within the process the advisor manages deadlines, process letters, management presentations, the question and answer process and the comparability of offers, and supports negotiations through to completion. Compensation combines a retainer with a success fee that may be value-linked and include a higher rate above an agreed target valuation.

The main contribution lies not in introducing a buyer but in creating competition and in the quality of preparation, because both influence price and terms more than the closing negotiation does. The term should be distinguished from the capital markets usage of sell-side meaning banks and research houses. The work falls into preparation, outreach and negotiation.

Preparation covers producing documents, preparing the numbers, often supported by vendor diligence, and settling the approach strategy. Outreach involves developing a list of potential buyers spanning strategic acquirers and financial investors and contacting them in a coordinated sequence. Negotiation covers price, structure, warranties and timetable.