The purpose of the Professional Practice Statements (PPSs) is to ensure Affiliates of the Affiliation for Business Resilience & Turnaround (ABRT), and all those who work for, represent or act on their behalf, maintain high professional standards at all times.
The PPSs set out guidance and suggested standards of practice for those engaged in the restructuring and turnaround of a business, and in the resolution of financial distress affecting a business or its stakeholders. They are intended to promote best-practice conduct that is aligned with prevailing statute, ethical frameworks and other relevant professional guidelines.
The PPSs describe required practice as a professional benchmark but are not statutory or legislative statements. They are not intended to prescribe a single mandatory approach or to operate as rigid rules. Affiliates are expected to exercise professional judgment, having regard to the specific circumstances, complexity and risk profile of each matter.
1 Marketing the Business for Sale
1.1 Role of the Affiliate
A core function of an ABRT Affiliate (‘Affiliate’) when advising company directors, representatives, agents and employees during a turnaround or restructuring process is to assist in identifying whether a sale of the business or its assets is appropriate and, if so, the most effective market in which that sale could be conducted.
The Affiliate’s role is advisory and strategic. Decisions relating to sale structure, timing and execution remain the responsibility of the directors.
1.2 Internal Sell-Side Due Diligence
Before engaging with prospective purchasers, the Affiliate should consider whether it is appropriate to conduct an internal sell-side due diligence review.
This process involves reviewing the company, its business and operations from the perspective of a potential buyer in order to:
- identify commercial, operational, financial or regulatory issues prior to external disclosure
- allow directors to remediate issues where practicable
- determine how unresolved issues should be disclosed, framed or managed
- reduce execution risk and negotiation friction later in the process
Where issues cannot be resolved, the Affiliate may assist directors in developing defensible disclosure strategies and negotiating positions.
1.3 Regulatory and Transactional Readiness
Internal due diligence may also clarify whether corporate, third-party or regulatory approvals, consents or notifications are required to implement a transaction.
Undertaking this work early can materially shorten transaction timelines and assist in assembling documentation required for buyer-side due diligence.
1.4 Potential Purchaser Categories
Depending on the circumstances, potential purchasers may include:
Directors or Related Parties
Directors may be well placed to acquire the business given their familiarity with operations, customers, suppliers and staff.
In limited circumstances, this may involve a transaction that could be characterised as a phoenix-style outcome. Any such transaction must be carefully structured, appropriately valued, properly documented and compliant with creditor-defeating disposition provisions and PPS.5 Director Safe Harbours.
Competitors
Competitors may seek to acquire customer bases, contracts, employees, work in progress or stock. While competitors may offer execution certainty, they do not always provide the highest value.
In some processes, a competitor may act as a stalking horse bidder to establish a price floor or transaction framework.
Management Buy-Out (MBO)
Senior personnel or employees may acquire the business where they can secure funding based on their operational expertise. MBOs often involve mixed debt and equity funding and may appeal where confidentiality or continuity is critical.
Private Equity or Institutional Investors
Private equity investors typically focus on growth potential, restructuring opportunities and exit pathways. These transactions often involve management replacement or augmentation post-acquisition.
High Net Worth or Strategic Investors
Individuals with industry experience may seek bolt-on acquisitions aligned to broader portfolio strategies.
1.5 Legal and Specialist Advice
Where the Affiliate is not legally qualified, consideration should be given to engaging a corporate lawyer to coordinate legal workstreams including:
- transaction documentation
- ownership transfer mechanics
- regulatory approvals
- employment, property, tax and competition issues
Specialist advice may be required where competition law, monopoly risk, industry licensing or cross-border elements arise.
2 Deciding on a Marketing Approach
2.1 Marketing Strategy
The Affiliate should assist directors in determining an appropriate marketing strategy having regard to value maximisation, timing, confidentiality and execution risk.
Marketing approaches may include:
- targeted advertising via sector-specific or geographic channels
- engagement of brokers or agents with sector expertise
- direct approaches to competitors, suppliers or strategic parties
- use of business-for-sale platforms
- leveraging professional networks including accountants, lawyers and financiers
Multiple approaches may be deployed sequentially or concurrently through a staged release of information.
2.2 Confidentiality Considerations
In distressed or turnaround contexts, confidentiality is often critical. Premature disclosure of a sale process may disrupt operations, trigger staff departures or undermine customer confidence.
Non-disclosure agreements should be used consistently, but directors should be aware that absolute confidentiality cannot be guaranteed.
3 The Information Memorandum
3.1 Purpose
An information memorandum is prepared to provide prospective purchasers with a structured overview of the business, including historical performance, current position and forward outlook.
It may also be referred to as an offering or investment memorandum.
3.2 Content and Use
The document typically includes:
- key selling points and differentiators
- high-level financial information
- operational overview
- market positioning
It is often distributed to multiple parties to elicit expressions of interest, forming the basis for shortlisting and further engagement.
4 The Presentation
4.1 Structure and Content
A detailed presentation may be prepared for shortlisted parties, typically including:
- historical financial statements
- cash flow and performance analysis
- forward projections and assumptions
- EBITDA and other performance metrics
4.2 Delivery
The Affiliate should assist directors and senior personnel in:
- allocating presentation roles
- anticipating questions
- ensuring consistency of messaging
Supporting materials may include electronic presentations and handouts.
5 The Sales Pack
5.1 Disclaimers and Responsibility
The sales pack should include:
- disclaimers limiting reliance on representations
- confirmation that purchasers must rely on their own enquiries
- confidentiality undertakings
- clarification that responsibility for content rests with the company and its directors
The Affiliate should expressly state their advisory role and absence of responsibility for underlying representations.
6 Due Diligence
6.1 Buyer-Led Due Diligence
In most transactions, buyer-side due diligence is led by the purchaser and their advisers through detailed information requests.
6.2 Purpose
Due diligence enables purchasers to assess:
- financial position
- operational risks
- legal exposures
- regulatory compliance
Post-completion, risks typically transfer to the purchaser subject to contractual protections.
6.3 Affiliate Role
The Affiliate should assist in coordinating responses, ensuring accuracy and completeness, and managing disclosure risk.
6.4 Data Rooms
Due diligence material may be made available through physical or virtual data rooms with controlled access.
