Selling A Business

Let us take care of selling your business.

Business Valuations

We provide a valuation service that helps both purchasers and sellers accurately value a business. This considers the following factors:

  • Turnover
  • Profit
  • EBITDA
  • Management structure
  • Risk
  • Changes in legislation & compliance
  • Technology
  • Intellectual property
  • Assets
  • Changes in the marketplace (trends)
  • Cash-flow
  • Debt

Although there are numerous methods to value a business, it is still an emotive issue. Often, the owner/shareholder, who may have invested a lot of emotional energy – as well as their time and finances – into establishing their business, will overvalue it for that reason. Ultimately though, a business is only worth as much as a company is prepared to pay. As an intermediator, we are skilled in helping both parties reach a satisfactory agreement.

 

Steps to a successful sale

Some of the typical steps taken by Industrial M&A:

  • Evaluate where the company is at the start of the process
  • Gap analysis (finds out which areas of the business will reduce the sales price or prevent a deal from taking place. Formulate a plan to eliminate those areas of concern)
  • Increase sales
  • Reduce costs
  • Increase operating profit
  • In turn, increase EBITDA
  • Stock management (if appropriate)
  • Asset valuation
  • Produce a full set of financial documents (not just end of year accounts)
  • Identify the USP (Unique Selling Point) of the business
  • Reduce risk (personnel, IT infrastructure, protect intellectual property i.e. trademarks, copyrights, patents, compliance with legislation/tax etc.)
  • Preparation of professional “teaser” (high-level information to tempt a buyer to proceed
  • Preparation of a “Sales Pitch” Presentation
  • Preparation of a complete buyer-ready diligence pack, ensuring financial information can be refreshed easily
  • Produce a “Heads of Terms” based on your terms

Selling a business is often a very stressful period for both the seller and the purchaser, especially alongside the day-to-day responsibilities of running a company. At Industrial M&A, we can take care of this process for you, from due diligence – which can often be time-consuming, contentious, frustrating, and sometimes confrontational – through to a successful completion.

Due diligence focuses on discovering and understanding the key risks in a company. Carefully planned due diligence will identify and clarify areas such as current obligations, liabilities, problematic contracts, and litigation risks.

As with a lot of business deals, the devil is in the detail; due diligence is only as good as the information gathered, whether that involves reviewing countless documents or face-to-face conversations with key stakeholders. We advocate starting the information-gathering process early – up to 12 months before the sales process gets underway, to ensure full preparedness.

Our systematic and coordinated approach ensures the entire process is properly managed, communicated and coordinated with the best sale price ultimately achieved.

Depending on the time available/circumstances, the above process will increase the multiples in EBITDA that a company can demand on a sale price.

For those selling a business, we can advise on a planned exit plan to ensure a maximum return on investment.

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Exit Planning

A properly planned exit strategy will help you sell your business for a higher value.

All too often a life circumstance, which is often outside of your control, such as a family illness, bad debt or a change in the market, triggers a reaction to sell a business quickly. This can result in a buyer taking advantage of the situation and offering lower than the market value.

Correct preparation is key and that can take up to 2 years depending on the factors involved.

We can assist you in the process, whether it is a direct sale to a competitor, a Management Buy Out (MBO), a Management Buy In (MBI), a Venture Capital (VC) backed deal, a Private Equity (PE) backed deal, sale to employees through an ownership trust, or a straight merger with another company.

Distressed Business Sale

Acting quickly when a business is in a distressed state is crucial.

In many cases, there is very little time to prepare the business for sale, but it is still important to present the company to the right clients in a professional manner. Appearing desperate can adversely affect the sale price.

Discretion is even more important during these particular M&A projects. If information falls into the hands of certain competitors or clients, it could damage the business going forward.

Typically, distressed businesses do not have disposable funds to pay upfront M&A fees, as they are either tied up in the business’ assets or being diverted to pay for operational costs. Our flexible payment plans, whereby our costs are recoverable from the sale of the business, enables the seller to overcome this hurdle.

Sale Process

How a typical sales process might evolve.

  • Scoping meeting with Industrial M&A Ltd
  • High-level financial review
  • Company valuation
  • Submit sales “teaser”
  • Identify potential buyers
  • Discreetly approach potential buyers (NDA signed)
  • Compile report highlighting all interested parties to seller
  • Conduct Initial presentation/sales pitch to all interested parties
  • Negotiate sale price with each potential buyer
  • Decide which potential buyer to progress with (sign typically 60-90 exclusivity deals at this point)
  • Issue “Heads of Terms”
  • Begin due diligence process
  • Renegotiate deal (if required)
  • Close deal

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