What do we do?
Most business owners will go through a sales process only once in their lives. It is therefore critical that you seek the right advice from advisers that have been through the process many times to make sure you get it right. Our experienced and qualified professional advisers will guide you through all aspects of the process.
Strategy – advise you on how to meet your objectives, maximise value and minimise cost.
Preparation – get your business into the optimum sale ready position.
Marketing – prepare a selling memorandum or financial analysis to attract potential buyers.
Buyers – identify prospective acquirers through local, national and international sales networks.
Offer selection – invite offers from buyers and advise you on the offer that best meets your criteria and work towards agreeing Heads of Terms.
Closing the deal – manage the due diligence process on your behalf and work with you and your legal advisers through to completion including negotiation of the working capital and completion accounts mechanism.
A management buy-out (MBO) can provide an ideal exit for business owners who want to reward their management team for their contribution to building the business. An MBO often addresses concerns over losing business identity or independence if sold to trade or private equity and can secure ongoing employment for staff. Our corporate finance team can guide the shareholders through the process of selling their business to an MBO team.
Approach – an MBO can either be led by the MBO team where they are given the remit and resources to seek finance to make an offer to the vendors or it can be vendor led where the business owner packages up a deal for the MBO Team to implement.
Feasibility – it is critical at an early stage to establish the owner’s price expectation to avoid any conflict further down the process.
Price and structure – the MBO Team should seek an independent valuation of the company and assess whether a suitable structure can be put in place which both meets the vendor’s expectation but importantly, is affordable for the business going forward.
Funding – the purchase price for an MBO often consists of existing cash, deferred consideration, management equity and sometimes retained shares by the vendor.
Vendor negotiations – this is a very sensitive area as you and the MBO team are on the same side during your day job but on the other side of a deal negotiation. Our team understands the sensitive nature and can lead these discussions to avoid conflict.
Transaction management – an MBO can be complex and we can manage the deal through diligence and the completion stage to ensure an efficient process.
Employee ownership is an increasingly popular succession option for business owners and is usually facilitated by establishing an Employee Ownership Trust (EOT). The structure was established in 2014 to encourage business owners to sell a controlling stake to employees to provide a clear framework for employee ownership. The structure can offer significant tax advantages to sellers where the EOT owns greater than 50% of the shares post transaction and where the EOT owns shares for the benefit of the employees. If you are considering selling to an EOT or are an employee or management presented with the opportunity, we can assist you through the process.
Feasibility study – assist you in preparing a feasibility study which will consider the key aspects of an EOT transaction including valuation, structure, funding, employee engagement, share plan options etc.
Valuation and structure – an independent valuation of the company should be undertaken to assess whether a suitable structure can be put in place which both meets the vendor’s expectation but importantly, is affordable for the business going forward.
Funding – the purchase price for an EOT transaction often consists of existing cash, deferred consideration, retained shares by the vendor and sometimes external funding. We can help structure a transaction and assist in raising debt and equity funding as appropriate.
Tax clearance – if structured properly there are significant tax advantages for the vendors and the company. We work closely with our tax team to ensure that clearance from HMRC is obtained to secure these advantages.
Employee engagement – transitioning to an employee owned company will be a new experience for all involved. We can use our experience to walk all parties involved through the process including governance, employee council meetings, information sharing etc.
Valuation is at the core of all transactions whether it be considering the sale of your business, raising equity finance or making an offer to buy another business. Unless a valuation can be agreed between the parties the deal will not happen and is therefore fundamental to your decision making. Valuations are not an exact science and involve an element of subjectivity. The true test is what a willing buyer or investor is prepared to pay and what a willing seller is prepared to sell for or give away in terms of shares. Our experienced team can assist you in assessing a value for whatever purpose.
Adjusted underlying EBITDA – earnings before interest, tax, amortisation, depreciation and amortisation is a common factor in assessing value. Assessing the underlying position is not always straight forward and can be based on historic trading, current trading but could also factor in future trading if there is secure or contracted revenue going forward. Adjustments to give a “normal” position will also need to be factored in. Our experts can advise on how to get to a underlying position.
Multiple – for profitable, trading businesses a suitable multiple is applied to EBITDA to give an Enterprise Value. We have access to transactional information which can support the valuation multiple or range of multiples based on business activity and sector.
Cash and debt adjustments – the Enterprise Value will be adjusted for cash and debt like items to give an Equity Value, which is the net value to shareholders (before tax).
Valuation report – to give an informed view on value we need to fully understand your business and therefore need to spend sufficient time with you. The output from our review will be a comprehensive written report setting out our methodology and assumptions.
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