Delivering Value on Exit

If your ambition is to sell or get investment through private equity, you need a solid plan to drive the highest value.

Don’t put be tempted to put it off as you get immersed in the daily grind. You should make preparations sooner rather than later. We can help you devise the correct strategy and make sure everything is in good shape for when the time comes.

We have a proven track record in adding value and maximising return on exit. We know what buyers and investors look for and we have the contacts to help you make the right connections to get the best deal.

MAXIMISING VALUE

If you plan to sell the business or attract investment, you obviously want to get the highest possible value or the best possible terms.  That process has to start way ahead of the sale or investment point – in fact you need to begin planning years in advance.  There are various steps you can take to maximise that value, such as growing your sales, making sure your management team is robust, bringing in talent to enhance your capabilities and ensuring your contracts are robust and long-term.

ATTRACTING EXTERNAL INVESTMENT

To finance your plans, you might look for external investment, either through bank loans or other sources including investment from private equity or other financial institutions. Knowing what investors value, what they expect for their investment and how they might get involved in the business, is essential before making the leap. Understanding what to expect before and after any investment is essential.

IDENTIFYING THE RIGHT PARTNERS

If you want to sell your business or attract investment, you will always create interest if things are in good shape.  Each approach will come with different cultures, objectives and focus for what they want to do.  As the owner, you will feel an emotional commitment to the business and its people.  Selecting the right person to work with you and your team in the future is essential. This may mean accepting less, in the knowledge that the company is going to be in good hands.

STRONG GOVERNANCE

One of the first things that any investor or buyer will look at is how well your business is run.  They will carry out due diligence and study your structures and financial controls.  Any weaknesses that they can identify will reduce the value of your deal.  Running your business to the best possible standards – making sure your structures and controls are the best they can be – will give them less opportunity to knock down the value and lets you position your business in the best possible light.
Running the business to build its value just makes sense.

A STRONG TEAM

A prospective investor or purchaser is of course interested in the financial prospects of the business; they are buying into your future results after all. They are as interested, if not more so, in your team as they will determine if future ambitions and objectives are realised. It is important that your team is strong or the deal may not deliver the value you expect. This means identifying gaps in your team and addressing them now, as well as having succession plans in place for key people. Financial strength and a strong team will drive greater value.

EFFECTIVE REWARD

You need to consider how your ownership and management team are rewarded in the event of a sale or investment.  If they are leaving the business, they will want maximum value. Also, you might wish to increase ownership in the run up to any sale to ensure deserving people are adequately rewarded. Have you considered team or bonus arrangements for a successful transaction and is your management team going to be incentivised to drive the investment going forward? And is all of this as tax efficient as it could be?