Blake Lapthorn, Critchleys and Shirlaws hosted a seminar on Thursday 13 September at Blake Lapthorn's Oxford office on maximising the potential of buying or selling a business in today's economic climate.
Planning is everything:How to maximise the potential of buying or selling a business in today’s economic climate Edward Lee Head of Corporate Finance email@example.com T: 01865 254222
Who is the buyer likely to be and why? Private Equity – Very active? – What excites them? – Scaleability? Trade Buyer – How has your sector faired? – Market noise? – Exit strategy? MBO – Known entity? – Lower price = less risk? – Funding?
Who is the buyer likely to be and why? Consolidator – The cycle – The “King maker” Overseas interest – What are we seeing? – Why are we seeing it?
First impressions count! Legal audit – It’s like buying a house – Good and bad seen in context How do you make a good first impression? – Pre sale grooming – Tidy up! – Review contracts 2nd tier management – How good are they? – Why is it important?
Documents Confidentiality and Exclusivity Agreements – Confidentiality How to keep a secret? At what stage? – Exclusivity Only game in town or auction Timetabling and get out of jail free cards Heads – A summary – A moral stick – Time well spent?
Documents SPA – Shares v assets – Narrative – Warranties/Disclosure – Tax Deed Disclosure Letter – The more the merrier – Detail is everything
Risk DD – There is always a risk – Information is the key – Start process early Warranty Insurance – What is it? – How much? – Why use it? Limitations on warranties – All sellers? – Whole of price? – How long? – Cap, collars and floors
Buyer tactics Paper overload – Adding pressure – Bodies required Divide and conquer – Questioning quality of advice – The wedge Non lawyer heads – Experienced buyer tactic – Importance of early involvement of lawyers
Buyer tactics Tight timetables – More pressure – Late nights Good cop bad cop – Letting the lawyers take the blame – Prophets of doom! Industry specific tactics
Summary• Business cycle – Know where you are in the cycle – take the Stages test: http://www.shirlawscoaching.co.uk/stages• Timing – Invest in your business now and plan to exit ahead of the market!• Valuation = profit x multiple. Work on both to build value.