How to sell a pharmacy?Selling a pharmacy business can be a stressful, emotional and highly involved process. In many cases, you, or your family, will have worked for decades to build it up from nothing, building deep relationships with your local community along the way. For those of you looking to sell, knowledge is power. As the leading financial advisor to the Irish community pharmacy sector and the leading pharmacy sales brokerage firm in Ireland, Fitzgerald Power has extensive experience in advising pharmacy owners on the successful sale of their businesses.Here are the steps involved:1. Ensure you’re readyDo this by maximising revenue and profit opportunities. It is very difficult to realise potential in a business valuation, so the full value of available revenue and profit should be reflected in your P&L account if you hope to achieve maximum value.Maintain up to date, accurate accounting records. These records will form the basis of the valuation and your counterparty’s financial offer.2. Put an appropriate tax plan in placeIt is absolutely essential that employee contracts and handbooks are in place and fit for purpose. Equally important is the quality of the lease or freehold title. Lease issues are generally responsible for the majority of delayed transactions.You need to understand what your asset is worth before going to the market. A valuation will provide the lens through which offers can be assessed. 3. Engage experienced advisorsYou need experienced legal and commercial experts in your corner to make the transaction as smooth as possible and help you achieve the best price for your asset. Please contact our corporate finance department if you would like a steer on legal advisors who have pharmacy sector experience.4. Agree a timetable for the transactionYour advisors will outline a step plan with target dates for each deliverable. Initial engagement to deal completion can be as quick as three months but in practice it generally extends to six months.5. Agree a distribution list.Your commercial advisor will maintain a database of active purchasers and will help you to build a distribution list for your transaction. While your advisers will lead this process, it should involve your participation, including those you know who may have an interest in the process.A two-page teaser is circulated to the agreed distribution list. This document will contain enough information to whet the appetite of potential acquirers but will not be sufficient to identify the pharmacy. Potential acquirers are generally given 1 to 2 weeks (depending on the case) to express their interest in the process.Confidentiality agreements are sent to those that express an interest. This legal document will protect you against confidentiality breaches and should be put in place for all parties that express an interest before information is shared.The Information Memorandum (IM) is sent. The IM is sent to parties that return signed confidentiality agreements. These parties are generally given 2 – 3 weeks to assess the IM and make an offer. While some queries from potential acquirers can be answered at this stage the majority are held until due diligence commences. The information contained within the IM should be sufficient to make an informed bid. 6. Offers are received and assessed.Offers, accompanied by proof of funding, are assessed and a preferred bidder is selected. The process will sometimes move to a second round of bidding if there are a number of competing offers with similar commercial terms.Once a preferred bidder is selected Heads of Agreement are signed and due diligence commences. The information required to carry out the various due diligence workstreams (commercial, financial, taxation and legal) is generally made available via a virtual data room. This will be managed by your commercial advisor. 7. The legal documents are draftedThe purchaser’s solicitor will draft the transaction documents, to include the Share Purchase Agreement. These documents will be negotiated by the solicitors on both sides of the transaction, using the Heads of Terms as their framework. 8. Deal completionAny issues identified during due diligence are discussed, the legal documents are settled and the deal completes. The Share Purchase Agreement will allow for the agreement of completion accounts which will happen sometime after the deal closes. These completion accounts will be the basis for any final payment or price adjustment that may be required (as the working capital / net asset element of the purchase consideration will be based on best estimates at the completion date).The leading financial advisor to the Irish community pharmacy sector and the leading pharmacy sales brokerage firm in Ireland. While the process can be stressful, getting experienced financial and tax advisors on board will help immeasurably. The sale of a pharmacy business contains a number of complex aspects (tax efficient extraction of cash for the owners prior to sale, warranties and indemnities, regulatory notification with the HSE and PSI, non-compete provisions and completion accounts mechanisms to name but a few).Retaining seasoned advisers will ensure that the sale process is efficiently managed and that you get the best possible advice.As the leading financial advisor to the Irish community pharmacy sector and the leading pharmacy sales brokerage firm in Ireland, Fitzgerald Power, and our exclusive pharmacy team are not just financial experts in this market but are passionate advocates and creative thought leaders helping to drive the sector forward. Get in touch with Johnny O’Sullivan today if you would like to discuss a pharmacy sale. 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