Selling Your Company in Colombia: The Ultimate 8-Step Guide

For many entrepreneurs, selling a company is the culmination of years of effort and dedication. It is one of the most significant and complex transactions one can undertake, a process that goes far beyond a simple financial transaction. To ensure that value is maximized and the seller's interests are protected, it is essential to follow a structured roadmap and rely on expert advice.

Below, we break down the 8 essential steps to successfully navigate the process of selling a company in Colombia.

1. Preparation for the Sale

This is the fundamental phase. Poor preparation can cost millions in the final valuation.

• a. Evaluate motives and objectives: First and foremost, it is crucial to understand why you want to sell. Is it for retirement, to obtain liquidity, or to seek new horizons? Defining these objectives will align the entire strategy.

• b. Conduct an accurate valuation: It is vital to have a professional and objective valuation of the company. This sets realistic expectations and serves as a solid basis for negotiations.    

• c. Prepare the documentation: All key documentation must be organized and up-to-date: historical and audited financial statements, contracts with customers and suppliers, corporate records, etc.    

How can Heritage Financial Advisors help? At this critical stage, Heritage works closely with you to understand your long-term goals and corporate culture.  We conduct a professional and in-depth valuation of your company, which goes beyond a simple calculation to become a strategic tool.  Additionally, we guide you in optimizing your company before the sale and in organizing all documentation to present it in the most attractive way possible to potential buyers.    

2. Selection of Advisors

Trying to sell a company without a team of experts is an unnecessary risk.

• a. Hire professional advisors: It is essential to have lawyers and accountants specialized in M&A transactions.    

• b. Identify an intermediary: An investment bank acts as the conductor of the entire process, coordinating the parties and leading the strategy.    

How can Heritage Financial Advisors help? Heritage Financial Advisors acts as your lead advisor and investment bank throughout the entire process. Our team is composed of "expert consultants in negotiation and decision analysis"  and professionals with a proven track record of success in M&A transactions across a wide range of industries.  We coordinate the other advisors to ensure the entire team works towards your objectives.   

3. Planning and Marketing

Once the company is prepared, it's time to go to market strategically and confidentially.

• a. Develop a marketing strategy: The profile of ideal buyers (strategic or financial) is defined.

• b. Prepare an information memorandum: A professional and confidential document (CIM) is prepared, highlighting the company's value and potential.    

• c. Identify and contact buyers: A list of previously selected potential buyers is discreetly contacted.

How can Heritage Financial Advisors help? We use the appropriate methodology to find and negotiate with financial or strategic investors.  We take care of preparing a compelling and professional information memorandum  and, thanks to our network of contacts, including the Red Pacífico alliance, we access a universe of potential buyers throughout the region.    

4. Negotiation of Terms

This phase defines the foundations of the final agreement.

• a. Analyze offers: Initial offers or letters of intent (LOI) are received and analyzed.

• b. Initiate negotiations: Key terms are negotiated: price, form of payment, deadlines, and other conditions.    

• c. Establish non-disclosure agreements (NDA): Before sharing sensitive information, all interested parties must sign an NDA to protect the confidentiality of the process.    

How can Heritage Financial Advisors help? Negotiation is our strength. As expert consultants in negotiation , we manage the entire process: from signing NDAs to analyzing offers and negotiating the terms of the letter of intent, always seeking to maximize value for our clients.    

5. Due Diligence

The buyer conducts an exhaustive investigation to verify all of the company's information.

• a. Allow for thorough due diligence: The buyer is given access to information in an orderly manner.    

• b. Provide access to information: A "data room" is organized with all financial, legal, operational, and commercial information.    

How can Heritage Financial Advisors help? We orchestrate the entire due diligence process. Having prepared the company in phase 1, we manage the data room and act as the single point of contact for information requests, ensuring an efficient process and protecting the seller's interests.    

6. Contracts and Closing

This is the legal formalization of the transaction.

• a. Prepare the sale contracts: The Share Purchase Agreement (SPA), which includes all final terms, is drafted and negotiated.    

• b. Obtain regulatory approvals: The necessary permits from competent authorities are managed.

• c. Complete the closing: The final documents are signed, payment is made, and ownership of the company is transferred.

How can Heritage Financial Advisors help? We work in close collaboration with legal advisors to negotiate the commercial terms of the purchase agreement, ensuring that the agreement faithfully reflects what was agreed upon. Our knowledge of relevant regulations  allows us to coordinate the necessary steps for a successful closing.   

7. Transition and Post-Sale Closing

The sale does not end with the signing. An orderly transition is key to the future success of the business.

• a. Ensure an orderly transition: A plan is established for a smooth handover of the business to the new owner.

• b. Manage communication: Communication with employees, customers, and suppliers is handled.

• c. Fulfill post-sale obligations: Compliance with any contractual obligations after closing is ensured.

How can Heritage Financial Advisors help? Our commitment continues after the closing. We advise you on creating a transition plan that ensures business continuity and the capture of synergies by the buyer, consolidating the success of the operation.    

8. Final Evaluation

This is the moment to measure the success of the operation.

• a. Evaluate the success of the sale: The results obtained are compared with the objectives defined in the first stage.

• b. Analyze the financial and strategic impact: The impact of the transaction on the seller's wealth and future plans is analyzed.

• c. Consider lessons learned: Lessons are drawn for future strategic decisions.

How can Heritage Financial Advisors help? At the end of the road, we help you evaluate the success of the transaction against the objectives we defined together at the beginning of the process.  This final evaluation consolidates a long-term relationship based on trust, experience, and results.   

Selling a company is a strategic journey that demands meticulous preparation and flawless execution. Every step is crucial to maximizing value and ensuring a successful transition. In this complex process, having a partner like Heritage Financial Advisors provides you with the experience, network, and expert support necessary to transform the sale of your company into the milestone it should be: the successful culmination of your business vision.

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