Frequently asked questions
Given the current economic climate, isn’t now a terrible time to sell my business?
I want to sell my business, what should I do now?
How long will selling my business take?
How much of my time will it involve?
What about confidentiality?
I want to sell my business but not for a few years yet……
An acquisitive company has offered to buy my company already, what should I do now?
Can I retain a share of business upon sale?
Given the current economic climate, isn’t now a terrible time to sell my business?
In the current economic climate, M&A activity has reduced dramatically, there is no doubt about that. However, deals are still happening and in some instances at good prices. The worst affected are the “Big Ticket” deals where values are measured in hundreds of millions and billions. There are also sectors which are largely unaffected or recession proof. If you are not lucky enough to be in one of these sectors then you could still be in a good position to sell if you can demonstrate long term and consistent profit forecasts. A business which is supported by long term contracts is worth its weight in gold, especially in these uncertain times, and people are ready to pay for it.
If you require a more complex answer or would like to meet a PCF director to discuss your particular questions please contact Emma Ackroyd at emma.ackroyd@precision-corpfin.com
I want to sell my business, what should I do now?
The most important thing is that you find out whether someone wants to buy your business and that you do this in a way which protects the confidentiality of your business. It is important therefore that you speak to a reputable firm of corporate finance advisors. It is important that you get one that is capable of performing high quality confidential research but also who you feel comfortable dealing with. Selling your business is a very emotional experience and it is important that your chosen advisor has the ability to empathize as well as having the technical skill necessary to transact the deal.
If you require a more complex answer or would like to meet a PCF director to discuss your particular questions please contact Emma Ackroyd at emma.ackroyd@precision-corpfin.com
How long will selling my business take?
The process for selling your business can be as simple or as complicated as the respective parties make it. You could transfer share ownership to someone else in half an hour if you don’t ask for any money, but as the price goes up, so does the complexity. It takes time to convince a buyer to pay the top price and then more time to negotiate the legal deals they require to protect themselves. A process properly run and with a fair wind can take as little as 5-6 months however this timescale could double if complications arise.
If you require a more complex answer or would like to meet a PCF director to discuss your particular questions please contact Emma Ackroyd at emma.ackroyd@precision-corpfin.com
How much of my time will it involve?
Selling your business is capable of taking up all your time both asleep and awake! This is why it is essential to work with a full service lead advisory, not a brokerage firm. What you are looking for is someone who is capable of taking care of the entire process from inception to completion, with no need of your input as an owner. Input will always be required in the early stages of the process from management to assist in the preparation of sale memoranda and the like but you need an advisor capable of running all potential purchaser negotiations and dealing with the lawyers. To be sure your advisor is capable of doing this take references but also look at their clients, does it include Venture Capitalist firms and professional organizations?
If you require a more complex answer or would like to meet a PCF director to discuss your particular questions please contact Emma Ackroyd at emma.ackroyd@precision-corpfin.com
What about confidentiality?
Confidentiality is fundamental to successful completion of a disposal transaction. One of the biggest risks you face when trying to sell your business is that your staff, customers or competition will find out that the business is for sale. The way to protect confidentiality in a transaction is to perform proper in depth research into potential purchasers for the business and only approach potential acquirers once they have been properly vetted on an anonymous basis.
If you require a more complex answer or would like to meet a PCF director to discuss your particular questions please contact Emma Ackroyd at emma.ackroyd@precision-corpfin.com
I want to sell my business but not for a few years yet……
It is not possible to effectively plan for a strategic exit from a business without in depth knowledge of exactly who will buy the business and why. Therefore potential purchaser research needs to be done two to three years prior to exit and then tied in with a change plan to turn your business into exactly what the potential purchasers want.
If you require a more complex answer or would like to meet a PCF director to discuss your particular questions please contact Emma Ackroyd at emma.ackroyd@precision-corpfin.com
An acquisitive company has offered to buy my company already, what should I do now?
Even if you end up selling your business to a party that originally approached you it is essential to test the market appetite for your business to ensure that the correct price is being offered. It would, therefore, be a good idea to run a limited marketing exercise aimed at delivering three to four creditable offers with which to benchmark your original purchasers’ offer.
If you require a more complex answer or would like to meet a PCF director to discuss your particular questions please contact Emma Ackroyd at emma.ackroyd@precision-corpfin.com
Can I retain a share of business upon sale?
To get the maximum price for your business it is likely that you will sell to a serially acquisitive business in yours or a related market sector. A business such as this is likely to pay what we call a strategic premium for your shares. Although not without precedent it is very rare that such an enquirer would want anything other than 100% of your business. A purchaser willing to compromise on 100% ownership is likely to pay a lower overall price. If your objective is a partial exit from the business, other structures should be considered, for example a cash or equity release deal with a Venture Capitalist or bank or some form of vendor initiated management buy out.
If you require a more complex answer or would like to meet a PCF director to discuss your particular questions please contact Emma Ackroyd at emma.ackroyd@precision-corpfin.com
