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SEMINAR – FRIDAY 11 JUNE 2010 HOW TO SELL YOUR BUSINESS FOR ITS MAXIMUM VALUE
Agenda <ul><li>Presenters </li></ul><ul><li>The disposal process </li></ul><ul><li>How do you maximise value on exit? </li...
Presenters <ul><li>Dave Wilson </li></ul><ul><ul><li>Corporate Finance, Booth Ainsworth LLP </li></ul></ul><ul><ul><li>016...
The disposal process <ul><li>Understand shareholder objectives </li></ul><ul><li>Valuation </li></ul><ul><li>Define likely...
How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Fi...
1. Planning for exit <ul><li>Often a once in lifetimes opportunity </li></ul><ul><li>Exiting is not a game of chance </li>...
1. Planning for exit . . .  contd 2. Will my business be attractive to purchasers? 3. How much is my business worth? 1. Wh...
1. Planning for exit . . .  contd <ul><li>High level review </li></ul><ul><li>Trade sale </li></ul><ul><li>Financial </li>...
1. Planning for exit . . .  contd 2. Will my business be attractive to purchasers? 1. What are the possible exit routes? <...
1. Planning for exit . . .  contd 2. Will my business be attractive to purchasers? 3. How much is my business worth? 1. Wh...
1. Planning for exit . . .  contd 2. Will my business be attractive to purchasers? 3. How much is my business worth? 1. Wh...
How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Fi...
2. Grooming your business <ul><li>Is any grooming required? </li></ul><ul><li>Two typical triggers </li></ul><ul><ul><li>C...
2. Grooming your business . . .  contd <ul><li>Profit enhancement </li></ul><ul><ul><li>Increase turnover </li></ul></ul><...
2. Grooming your business . . .  contd <ul><li>Balance sheet improvements </li></ul><ul><ul><li>Reduce working capital </l...
How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Fi...
3. Find the strategic purchaser <ul><li>Get pro-active </li></ul><ul><li>Your knowledge </li></ul><ul><li>Desk-top researc...
How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Fi...
4. Optimise timing <ul><li>Maximum shareholder value near top of the curve </li></ul><ul><li>Best time = an art not a scie...
How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Fi...
5. Adopt the right process & tactics <ul><li>One size doesn’t fit all </li></ul><ul><li>Tight process vs flexibility </li>...
How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Fi...
6. Minimise your tax bill <ul><li>Background – Tax Rates </li></ul><ul><ul><li>Personal </li></ul></ul><ul><ul><ul><li>Cap...
6. Minimise your tax bill . . .  contd <ul><li>Tax Rates – The Implications </li></ul><ul><ul><li>Sell the company – capit...
6. Minimise your tax bill . . .  contd <ul><li>Sell The Company / Sell The Trade And Assets </li></ul><ul><ul><li>Tension ...
6. Minimise your tax bill . . .  contd <ul><li>Deferred Consideration (Share Sale) </li></ul><ul><ul><li>If a fixed part o...
6. Minimise your tax bill . . .  contd <ul><li>Earn Outs </li></ul><ul><ul><li>Typical structure </li></ul></ul><ul><ul><u...
6. Minimise your tax bill . . .  contd <ul><li>Consideration In Shares </li></ul><ul><ul><li>Share for share rules means t...
6. Minimise your tax bill . . .  contd <ul><li>Consideration in Loan Notes </li></ul><ul><li>Overview </li></ul><ul><ul><l...
6. Minimise your tax bill . . .  contd <ul><li>Pre sale due diligence </li></ul><ul><ul><li>Will look at the company’s tax...
How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Fi...
7. Legal process - minimise value leakage <ul><li>1 - What Is The Legal Process? </li></ul><ul><ul><li>Not just tick boxin...
7. Legal process - minimise value leakage <ul><li>2 – How Can This Affect Value? </li></ul><ul><ul><li>“ Warts and all?” <...
7. Legal process - minimise value leakage <ul><li>4 – Get House In Order: </li></ul><ul><ul><li>Statutory Books: </li></ul...
7. Legal process - minimise value leakage <ul><ul><li>Employment: </li></ul></ul><ul><ul><ul><li>Are there any contracts/t...
7. Legal process - minimise value leakage <ul><li>5 – Address Potential “Showstoppers”: </li></ul><ul><ul><li>Change of co...
7. Legal process - minimise value leakage <ul><li>6 – Objective: </li></ul><ul><li>Legal Process is Completed Quickly With...
Summary <ul><li>Focused on key areas that help to maximise value </li></ul><ul><ul><li>Make sure you properly plan and pre...
Questions and Answers
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100609 M&amp;A Seminar Presentation Version

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Mergers and acquisitions.

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Transcript of "100609 M&amp;A Seminar Presentation Version"

  1. 1. SEMINAR – FRIDAY 11 JUNE 2010 HOW TO SELL YOUR BUSINESS FOR ITS MAXIMUM VALUE
  2. 2. Agenda <ul><li>Presenters </li></ul><ul><li>The disposal process </li></ul><ul><li>How do you maximise value on exit? </li></ul><ul><li>Questions & answers </li></ul>
  3. 3. Presenters <ul><li>Dave Wilson </li></ul><ul><ul><li>Corporate Finance, Booth Ainsworth LLP </li></ul></ul><ul><ul><li>0161 475 3911 [email_address] </li></ul></ul><ul><li>Paul McKay </li></ul><ul><ul><li>Taxation, Booth Ainsworth LLP </li></ul></ul><ul><ul><li>0161 475 1559 [email_address] </li></ul></ul><ul><li>Jeremy Orrell </li></ul><ul><ul><li>Corporate Lawyer, SAS Daniels LLP </li></ul></ul><ul><ul><li>0844 391 5829 jeremy.orrell@sasdaniels.co.uk </li></ul></ul>
  4. 4. The disposal process <ul><li>Understand shareholder objectives </li></ul><ul><li>Valuation </li></ul><ul><li>Define likely exit routes </li></ul><ul><li>Timetable </li></ul>Planning & Grooming Research & Preparation Marketing Negotiating Due Diligence Completing the deal Exit strategy & tactics Ready to market Appetite tested Exclusivity granted Detailed negotiation Sale completed <ul><li>Address value drivers </li></ul><ul><li>Purchaser research </li></ul><ul><li>Prepare sales memorandum </li></ul><ul><li>Refine exit strategy </li></ul><ul><li>Make contact and assess interest </li></ul><ul><li>Distribute sales memorandum </li></ul><ul><li>Initial meetings </li></ul><ul><li>Receipt of indicative offers </li></ul><ul><li>Select short-list </li></ul><ul><li>Further information provision </li></ul><ul><li>Meetings </li></ul><ul><li>Second round bids </li></ul><ul><li>Preferred bidder selected </li></ul><ul><li>Detailed investigation </li></ul><ul><ul><li>Financial </li></ul></ul><ul><ul><li>Legal </li></ul></ul><ul><ul><li>Commercial </li></ul></ul><ul><li>Legal documentation </li></ul><ul><li>Final negotiations </li></ul>
  5. 5. How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Find the strategic purchaser </li></ul><ul><li>Optimise timing </li></ul><ul><li>Adopt the right process & tactics </li></ul><ul><li>Minimise your tax bill </li></ul><ul><li>Minimise value leakage through legal process </li></ul>
  6. 6. 1. Planning for exit <ul><li>Often a once in lifetimes opportunity </li></ul><ul><li>Exiting is not a game of chance </li></ul><ul><li>Planning and grooming is often necessary </li></ul><ul><li>Significantly impact price achieved by careful planning </li></ul><ul><li>Iterative process </li></ul><ul><li>Three stage exit strategy review </li></ul><ul><li>Adviser will use findings to determine the strategy and tactics to adopt </li></ul>
  7. 7. 1. Planning for exit . . . contd 2. Will my business be attractive to purchasers? 3. How much is my business worth? 1. What are the possible exit routes?
  8. 8. 1. Planning for exit . . . contd <ul><li>High level review </li></ul><ul><li>Trade sale </li></ul><ul><li>Financial </li></ul><ul><li>Management </li></ul><ul><li>Equity release </li></ul><ul><li>Flotation </li></ul>1. What are the possible exit routes?
  9. 9. 1. Planning for exit . . . contd 2. Will my business be attractive to purchasers? 1. What are the possible exit routes? <ul><li>Assess business through eyes of a purchaser </li></ul><ul><li>Pre-sale due diligence </li></ul><ul><li>Not just a financial review </li></ul><ul><ul><li>People </li></ul></ul><ul><ul><li>Contracts </li></ul></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Value drivers </li></ul></ul><ul><ul><li>Forecasting accuracy </li></ul></ul><ul><ul><li>etc etc etc </li></ul></ul>
  10. 10. 1. Planning for exit . . . contd 2. Will my business be attractive to purchasers? 3. How much is my business worth? 1. What are the possible exit routes? <ul><li>Desk top valuation </li></ul><ul><ul><li>Typically earnings multiple </li></ul></ul><ul><ul><li>Balance sheet considerations </li></ul></ul><ul><ul><li>Future vs historic </li></ul></ul><ul><ul><li>Gives a range of likely values </li></ul></ul><ul><li>Sets a base expectation . . . but key is to find the right strategic buyer </li></ul><ul><li>Low and high - can be 2x – 3x gap </li></ul><ul><li>CASE STUDY – Engineering Plastics </li></ul><ul><li>Does value meet requirements? </li></ul><ul><li>Current climate </li></ul>
  11. 11. 1. Planning for exit . . . contd 2. Will my business be attractive to purchasers? 3. How much is my business worth? 1. What are the possible exit routes? <ul><li>CONCLUSION </li></ul><ul><li>Clarity on likely exit routes </li></ul><ul><li>Identified factors which need addressing prior to exit </li></ul><ul><li>Understand likely value of business </li></ul><ul><li>Determine deal tactics and approach </li></ul>
  12. 12. How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Find the strategic purchaser </li></ul><ul><li>Optimise timing </li></ul><ul><li>Adopt the right process & tactics </li></ul><ul><li>Minimise your tax bill </li></ul><ul><li>Minimise value leakage through legal process </li></ul>
  13. 13. 2. Grooming your business <ul><li>Is any grooming required? </li></ul><ul><li>Two typical triggers </li></ul><ul><ul><li>Current value not meeting owners aspirations </li></ul></ul><ul><ul><li>Exit strategy identified a number of potential pitfalls which may deter a purchaser </li></ul></ul><ul><li>Timing can vary widely </li></ul><ul><ul><li>Games developer – 2 years!! </li></ul></ul><ul><ul><li>Print management - immediately </li></ul></ul>
  14. 14. 2. Grooming your business . . . contd <ul><li>Profit enhancement </li></ul><ul><ul><li>Increase turnover </li></ul></ul><ul><ul><li>Review margins </li></ul></ul><ul><ul><li>Overhead reductions </li></ul></ul><ul><li>Earnings multiple enhancement </li></ul><ul><ul><li>Quality of earnings </li></ul></ul><ul><ul><li>Build key value drivers </li></ul></ul><ul><ul><li>Reduce reliance on key customers and suppliers </li></ul></ul><ul><ul><li>Prove business has growth opportunities </li></ul></ul><ul><ul><li>Tie in key employees, customers, suppliers etc </li></ul></ul>
  15. 15. 2. Grooming your business . . . contd <ul><li>Balance sheet improvements </li></ul><ul><ul><li>Reduce working capital </li></ul></ul><ul><ul><li>Timing of capital expenditure </li></ul></ul><ul><ul><li>Sale & leaseback of major assets? </li></ul></ul><ul><li>Address potential deal breakers </li></ul><ul><ul><li>Quality and reliability of financial information </li></ul></ul><ul><ul><li>Budgets realistic and support price expectations </li></ul></ul><ul><ul><li>Onerous contracts </li></ul></ul><ul><ul><li>Clean up contingencies </li></ul></ul><ul><ul><li>General good housekeeping – records, regulation, health & safety etc </li></ul></ul>
  16. 16. How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Find the strategic purchaser </li></ul><ul><li>Optimise timing </li></ul><ul><li>Adopt the right process & tactics </li></ul><ul><li>Minimise your tax bill </li></ul><ul><li>Minimise value leakage through legal process </li></ul>
  17. 17. 3. Find the strategic purchaser <ul><li>Get pro-active </li></ul><ul><li>Your knowledge </li></ul><ul><li>Desk-top research </li></ul><ul><li>Trade sale </li></ul><ul><ul><li>Competitors </li></ul></ul><ul><ul><li>Overseas </li></ul></ul><ul><li>Don’t forget your NOB’s </li></ul>
  18. 18. How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Find the strategic purchaser </li></ul><ul><li>Optimise timing </li></ul><ul><li>Adopt the right process & tactics </li></ul><ul><li>Minimise your tax bill </li></ul><ul><li>Minimise value leakage through legal process </li></ul>
  19. 19. 4. Optimise timing <ul><li>Maximum shareholder value near top of the curve </li></ul><ul><li>Best time = an art not a science </li></ul><ul><li>Internal timing – you can influence </li></ul><ul><li>External timing – monitor and react </li></ul><ul><li>Current climate </li></ul>Time X X Exit towards top of value curve Value Value drivers
  20. 20. How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Find the strategic purchaser </li></ul><ul><li>Optimise timing </li></ul><ul><li>Adopt the right process & tactics </li></ul><ul><li>Minimise your tax bill </li></ul><ul><li>Minimise value leakage through legal process </li></ul>
  21. 21. 5. Adopt the right process & tactics <ul><li>One size doesn’t fit all </li></ul><ul><li>Tight process vs flexibility </li></ul><ul><li>Current environment </li></ul><ul><li>Adviser should ascertain the right tactics </li></ul><ul><li>CASE STUDY </li></ul><ul><ul><li>Accident Repair </li></ul></ul><ul><ul><li>Haulage </li></ul></ul>
  22. 22. How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Find the strategic purchaser </li></ul><ul><li>Optimise timing </li></ul><ul><li>Adopt the right process & tactics </li></ul><ul><li>Minimise your tax bill </li></ul><ul><li>Minimise value leakage through legal process </li></ul>
  23. 23. 6. Minimise your tax bill <ul><li>Background – Tax Rates </li></ul><ul><ul><li>Personal </li></ul></ul><ul><ul><ul><li>Capital gains tax – 18%, but attractive rates for disposal of business assets </li></ul></ul></ul><ul><ul><ul><li>Entrepreneur’s Relief 10% on life time gains of £2m </li></ul></ul></ul><ul><ul><ul><li>Government have indicated that the rates for the sale of business assets will remain attractive </li></ul></ul></ul><ul><ul><ul><li>Income tax </li></ul></ul></ul><ul><ul><ul><li>40% on incomes of £37,400 to £150,000 but note 60% band </li></ul></ul></ul><ul><ul><ul><li>50% on incomes over £150,000 </li></ul></ul></ul><ul><ul><li>Corporate </li></ul></ul><ul><ul><ul><li>21% on profits up to £300,000 </li></ul></ul></ul><ul><ul><ul><li>29.75% on profits between £300,000 and £1.5m </li></ul></ul></ul><ul><ul><ul><li>28% on profits over £1.5m </li></ul></ul></ul>
  24. 24. 6. Minimise your tax bill . . . contd <ul><li>Tax Rates – The Implications </li></ul><ul><ul><li>Sell the company – capital gain – tax rate 10% / 18% </li></ul></ul><ul><ul><li>Company sell the assets – corporation tax at 21% / 29.75% / 28% </li></ul></ul><ul><ul><li>But then… how do you extract the post tax “profits” </li></ul></ul><ul><ul><li>Dividends, tax costs 25% (40%) 36.11% (50%) </li></ul></ul><ul><ul><li>Giving an effective overall tax rate of 40.75% - 54.00% </li></ul></ul><ul><ul><li>Liquidate the company, giving rise to a capital gain, tax cost 10% / 18% </li></ul></ul><ul><ul><li>Giving an effective overall tax rate of 29% - 37% </li></ul></ul>
  25. 25. 6. Minimise your tax bill . . . contd <ul><li>Sell The Company / Sell The Trade And Assets </li></ul><ul><ul><li>Tension between the needs of the purchaser / vendor </li></ul></ul><ul><ul><li>Typically purchaser will want to buy the assets </li></ul></ul><ul><ul><ul><li>Enhanced capital allowances </li></ul></ul></ul><ul><ul><ul><li>Tax relief for acquired goodwill </li></ul></ul></ul><ul><ul><ul><li>No history </li></ul></ul></ul><ul><ul><li>Vendor will want to sell the company </li></ul></ul><ul><ul><li>Result </li></ul></ul><ul><ul><ul><li>A “horse-trade” but need to understand the issues </li></ul></ul></ul>
  26. 26. 6. Minimise your tax bill . . . contd <ul><li>Deferred Consideration (Share Sale) </li></ul><ul><ul><li>If a fixed part of the consideration is deferred the final amount is taxed (capital gains) in the year the contract is finalised </li></ul></ul><ul><ul><li>Same rule applies if the consideration is conditional upon a specific event </li></ul></ul><ul><ul><li>Cash flow issues </li></ul></ul><ul><ul><li>Computation only adjusted if part of the consideration becomes irrecoverable </li></ul></ul>
  27. 27. 6. Minimise your tax bill . . . contd <ul><li>Earn Outs </li></ul><ul><ul><li>Typical structure </li></ul></ul><ul><ul><ul><li>Fixed sum on completion </li></ul></ul></ul><ul><ul><ul><li>Further sum based on a formula e.g. share of profits for next three years </li></ul></ul></ul><ul><ul><ul><li>Continue as an employee for next three years </li></ul></ul></ul><ul><ul><li>Tax treatment of the earn out element </li></ul></ul><ul><ul><ul><li>Unquantifiable further sum regarded as a chose in action </li></ul></ul></ul><ul><ul><ul><li>Value of the chose in action treated as part of the consideration for the share sale </li></ul></ul></ul><ul><ul><ul><li>Gain qualifies for Entrepreneur's Relief </li></ul></ul></ul><ul><ul><ul><li>Further gain when receive deferred consideration </li></ul></ul></ul><ul><ul><ul><li>But no Entrepreneur’s Relief </li></ul></ul></ul><ul><ul><ul><li>Care needs to be taken to avoid characterising the deferred element as some form of bonus, since HMRC may seek to tax as employment income </li></ul></ul></ul>
  28. 28. 6. Minimise your tax bill . . . contd <ul><li>Consideration In Shares </li></ul><ul><ul><li>Share for share rules means that the capital gain on the disposal can usually be deferred </li></ul></ul><ul><ul><li>New shares treated as being acquired at the same time, and same amount as the old shares </li></ul></ul><ul><ul><li>Election can be made to opt out of the share exchange rates </li></ul></ul><ul><ul><li>This means that the benefit of Entrepreneur's Relief can be ‘banked” </li></ul></ul><ul><ul><li>When part cash, part shares, consideration pro-rated </li></ul></ul><ul><ul><li>But consider the cash flow issue </li></ul></ul>
  29. 29. 6. Minimise your tax bill . . . contd <ul><li>Consideration in Loan Notes </li></ul><ul><li>Overview </li></ul><ul><ul><li>Where the purchaser satisfies part of the consideration by issuing loan notes, an appropriate part of the vendor’s gain is deferred until the loan note is redeemed. </li></ul></ul><ul><li>Qualifying Corporate Bond </li></ul><ul><ul><li>Capital gains based on the seemed disposal of the shares at the time of the exchange is held over </li></ul></ul><ul><ul><li>Will become payable when the QCB is paid or redeemed </li></ul></ul><ul><ul><li>ER is deducted in arriving at the gain held over </li></ul></ul><ul><ul><li>Potential problem if QCB not redeemed in full </li></ul></ul><ul><li>Non Qualifying Corporate Bond </li></ul><ul><ul><li>Treated as a share reorganisation (share for share) </li></ul></ul><ul><ul><li>NQCB inherit history of original shares </li></ul></ul><ul><ul><li>May not obtain ER on redemption </li></ul></ul><ul><ul><li>However, can “bank” benefit of ER by relevant election </li></ul></ul>
  30. 30. 6. Minimise your tax bill . . . contd <ul><li>Pre sale due diligence </li></ul><ul><ul><li>Will look at the company’s tax affairs for the last 6 years: </li></ul></ul><ul><ul><ul><li>Corporation Tax </li></ul></ul></ul><ul><ul><ul><li>VAT </li></ul></ul></ul><ul><ul><ul><li>PAYE /NIC </li></ul></ul></ul><ul><ul><li>Benefit of “good housekeeping” </li></ul></ul><ul><ul><li>Warranties & indemnities </li></ul></ul>
  31. 31. How do you maximise value on exit? <ul><li>Planning for exit </li></ul><ul><li>Grooming your business </li></ul><ul><li>Find the strategic purchaser </li></ul><ul><li>Optimise timing </li></ul><ul><li>Adopt the right process & tactics </li></ul><ul><li>Minimise your tax bill </li></ul><ul><li>Minimise value leakage through legal process </li></ul>
  32. 32. 7. Legal process - minimise value leakage <ul><li>1 - What Is The Legal Process? </li></ul><ul><ul><li>Not just tick boxing </li></ul></ul><ul><ul><li>Heads – the “road map” – exclusivity & confidentiality </li></ul></ul><ul><ul><li>Due Diligence </li></ul></ul><ul><ul><ul><li>Identify any issues </li></ul></ul></ul><ul><ul><ul><li>Is it worth proceeding? </li></ul></ul></ul><ul><ul><li>Sale Documentation </li></ul></ul><ul><ul><ul><li>“ War and Peace” </li></ul></ul></ul><ul><ul><ul><li>C. 40 documents </li></ul></ul></ul>
  33. 33. 7. Legal process - minimise value leakage <ul><li>2 – How Can This Affect Value? </li></ul><ul><ul><li>“ Warts and all?” </li></ul></ul><ul><ul><li>Warranties and indemnities: </li></ul></ul><ul><ul><ul><li>Retentions </li></ul></ul></ul><ul><ul><ul><li>Price reductions </li></ul></ul></ul><ul><ul><ul><li>Claims </li></ul></ul></ul><ul><ul><li>Delay: </li></ul></ul><ul><ul><ul><li>Price chipping </li></ul></ul></ul><ul><ul><ul><li>Goes off </li></ul></ul></ul><ul><li>3 – How Can Value Leakage Be Avoided? </li></ul><ul><ul><li>Pre sale due diligence </li></ul></ul><ul><ul><li>Get your “house in order”. </li></ul></ul>
  34. 34. 7. Legal process - minimise value leakage <ul><li>4 – Get House In Order: </li></ul><ul><ul><li>Statutory Books: </li></ul></ul><ul><ul><ul><li>Where are they? </li></ul></ul></ul><ul><ul><ul><li>Are they accurate? </li></ul></ul></ul><ul><ul><li>Share Certificates: </li></ul></ul><ul><ul><ul><li>Where are they? </li></ul></ul></ul><ul><ul><ul><li>Have they been issued? </li></ul></ul></ul><ul><ul><li>Properties: </li></ul></ul><ul><ul><ul><li>Leasehold or freehold </li></ul></ul></ul><ul><ul><ul><li>Term – break provisions </li></ul></ul></ul><ul><ul><ul><li>Conditions </li></ul></ul></ul><ul><ul><ul><li>Rent - reviews </li></ul></ul></ul>
  35. 35. 7. Legal process - minimise value leakage <ul><ul><li>Employment: </li></ul></ul><ul><ul><ul><li>Are there any contracts/terms? </li></ul></ul></ul><ul><ul><ul><li>Any issues – grievances, disciplinary, claims? </li></ul></ul></ul><ul><ul><li>Contracts: </li></ul></ul><ul><ul><ul><li>Collate </li></ul></ul></ul><ul><ul><ul><li>Sort out any Issues </li></ul></ul></ul><ul><ul><ul><li>Continuation/transfer </li></ul></ul></ul><ul><ul><li>Licenses and Consents: </li></ul></ul><ul><ul><ul><li>Collate </li></ul></ul></ul><ul><ul><ul><li>Sort out any issues </li></ul></ul></ul><ul><ul><ul><li>Continuation/transfer </li></ul></ul></ul>
  36. 36. 7. Legal process - minimise value leakage <ul><li>5 – Address Potential “Showstoppers”: </li></ul><ul><ul><li>Change of control restrictions - obtain </li></ul></ul><ul><ul><li>Key employees: </li></ul></ul><ul><ul><ul><li>Compete – introduce restrictive covenants? </li></ul></ul></ul><ul><ul><ul><li>Notice periods - extend? </li></ul></ul></ul><ul><ul><ul><li>Claims – settle? </li></ul></ul></ul><ul><ul><li>Tax problems – settle </li></ul></ul><ul><ul><li>Lease – survey </li></ul></ul><ul><ul><li>Contracts – document </li></ul></ul><ul><ul><li>Poor Quality due diligence – spend time on this </li></ul></ul>
  37. 37. 7. Legal process - minimise value leakage <ul><li>6 – Objective: </li></ul><ul><li>Legal Process is Completed Quickly Without Issues Which Could Derail The Transaction or Reduce Value </li></ul>
  38. 38. Summary <ul><li>Focused on key areas that help to maximise value </li></ul><ul><ul><li>Make sure you properly plan and prepare </li></ul></ul><ul><ul><li>Get your house in order </li></ul></ul><ul><ul><li>Strategic purchaser </li></ul></ul><ul><ul><li>Optimise timing </li></ul></ul><ul><ul><li>Process & tactics </li></ul></ul><ul><ul><li>Minimise tax bill </li></ul></ul><ul><ul><li>Prevent value leakage </li></ul></ul><ul><li>Selling is not a game of chance </li></ul><ul><li>Start early & take appropriate advice </li></ul>
  39. 39. Questions and Answers
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