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M& A NEWS FRO M B CM S CO R P O R AT E                           W I N T ER 2008



         i D E A L
                A c...
Free
    services
    If you are considering selling your business, either now or in the future, please
    take advantage...
i D E A L


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BCMS Corporate• C r e d i t         cr u n ch




           Company sales buoyed
              by credit crunch
      Rel...
BCMS Corporate• C r e d i t               c r u n ch




R    eading headlines dominating
     the national print media an...
BCMS Corporate• D e a l             co m p l e t i o n




    Nuclear knowledge
    attracts world
    leading acquirer

...
BCMS Corporate• V a l u a t i o n




                        Think of a number
         Whatever your reason for selling ...
BCMS Corporate•Client interview




    Learning to take a step forward
        Trevor Pinder, Managing
       Director of...
BCMS Corporate• I n s i d e              d e a l s




                                    Inside deals
   In this issue D...
BCMS Corporate• T a x a t i o n              f e a t u r e




                                           Thinking of sell...
BCMS Corporate• C a s e               s t u d y




BCMS Corporate instrumental
in the sale of RTK
RTK Instruments, a lead...
BCMS Corporate• F i n a n c i a l               p l a n n i n g    f e a t u r e




              Identifying your
      ...
Only then can you truly                For more information on The
understand the implications of         Wissenbach Group...
BCMS Corporate• I n t e r n a t i o n a l




         International news
            The success of our refreshingly diff...
BCMS Corporate• P h i l a n t h r o p y




    Philanthropy
   “Do what you can, with what you have,
   where you are.”
 ...
BCMS Corporate• D e a l             hi g h l i g h t s
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Winter iDeal 2008

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The Winter '08 edition of BCMS Corporate's magazine iDEAL featuring market news, deal news from the UK and USA, case studies and related M&A information.

Published in: Business, Economy & Finance
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Winter iDeal 2008

  1. 1. M& A NEWS FRO M B CM S CO R P O R AT E W I N T ER 2008 i D E A L A c h i e v i n g y o u r i d e a l e x i t IS THE CREDIT CRUNCH BAD NEWS FOR COMPANY SALES? FREE SERVICES DEAL COMPLETIONS VALUATION DEAL HIGHLIGHTS INSIDE DEALS INSIDE> M&A TERMINOLOGY YOUR TAX WEALTH MANAGEMENT CASE STUDIES FINANCIAL PLANNING CLIENT INTERVIEWS INTERNATIONAL NEWS PHILANTHROPY
  2. 2. Free services If you are considering selling your business, either now or in the future, please take advantage of the free services below. A refreshingly different approach to selling your business for its maximum value David Rebbettes 2008 EDITION £49.99 Free half day Free business Free book seminars evaluation If you would like to read more about our refreshingly different At these free half day seminars, which attracted nearly 2,200 meetings approach to selling businesses Free and confidential business for their maximum value please business owners last year alone, evaluation meetings offer you the download* a free version of our we reveal how our refreshingly opportunity to find out more book entitled ‘Selling you different approach to selling a about us and how we can assist business for its maximum value’. business works and why this, as you in achieving a maximised The book details the sale process opposed to the traditional sale price. The majority of all clients’ businesses are taken methods, leads to a maximised business owners choose to meet through, from preparation to a sale price. A step-by-step guide us at our head office near completed sale. Throughout the takes attendees through our sale Newbury, Berkshire so that, in book, case studies cover actual process, from preparing a addition to discussing their examples of the mistakes made company for sale, contacting requirements, they can also view by business owners in the sale potential acquirers and receiving our offices and resources to fully process. This book provides offers through to price understand how we support our essential information for owners negotiation and sale completion. clients throughout the sale and shareholders of privately A fascinating collection of case process. However, our Business owned businesses, whether studies provide many invaluable Managers are also able to visit considering a sale now or simply lessons. Each seminar provides you either at your offices or planning for the future. an essential insight into the many another suitable location. Each pitfalls of the sale process and meeting typically lasts 90 Books can be downloaded at the methods necessary to avoid minutes, however the length of www.bcmscorporate.com them. the meeting is dictated by the or call 01635 296191. time you feel you need. To book onto a seminar visit www.bcmscorporate.com To arrange a meeting please call or call 01635 296191. 01635 296191. *Also available in hard copy 2
  3. 3. i D E A L With an unceasing focus on the credit crunch and turmoil in the financial markets these two issues In this issue of i D E A L are the focus of our lead story, but with a rather company sales. different view of the affects of these issues on Credit crunch page 4-5 With extensive media coverage of the credit crunch In a 24 hour news society the constant restatement of and turmoil on the financial markets what impact “doom and gloom” can make business owners jittery will these events have on smaller and mid - market and in my experience, disproportionately pessimistic. company sales? Completion – RM Consultants Ltd page 6 Clearly we are experiencing some transfer of the French nuclear giant Areva acquires credit crunch impact on banking to the real economy. And inevitably journalists and the media pounce on RM Consultants Ltd Valuation page 7 this information since it makes a good story. Here at BCMS Corporate, we assess the impact of the What constitutes the ‘value’ of a business? Completion – Provek Ltd page8 financial situation in what we consider to be a much Provek Managing Director talks to i D E A L calmer and measured way. At this point in time we Inside deals have not seen any decline in the number of business owners planning to sell their businesses. In fact, we page 9 How can the human element of managing a deal overcome barriers to the sale process? currently have as many clients this year as we had in the same period last year. Crucially, this has also been matched by record levels of strategically motivated M&A terminology explained page 9 Taxation page 10 acquirers. At the time of writing we have 43 client companies at accepted offer stage who are now Corporate structure for tax efficency Completion - RTK Instruments Ltd. page 11 entering the closing phase of the sale process. You can Managing Director Tim McLeman talks about read about three recent successes on pages 6, 8 the sale of RTK and 12. Your Magic number page 12 Further afield our operations in the USA continue to Managing your personal balance sheet grow very strongly and we are about to open a new Ask us page 13 office in Texas. All in all our own experience is that the smaller and Your questions answered on the subject of medium-sized business sale marketplace is far more traditional valuation methods International news page 14 positive than many would paint it. News from our offices in the USA, Europe and Turkey Philanthropy page 15 BCMS Corporate in the community. Deal highlights page 16 Brian Rebbettes - Chairman Selected deals from the last quarter. i DEAL is published quarterly by BCMS Corporate, Kingsclere Park, Kingsclere, Newbury, Berkshire, RG20 4SW, UK and is copyright protected. Reproduction in whole or part without written permission is strictly prohibited. While every care has been taken during the preparation of this magazine, BCMS Corporate cannot be held responsible for the accuracy of the information herein or for any consequence arising from it. BCMS Corporate accepts no responsibility for the views expressed by contributors. Opinions expressed do not necessarily reflect BCMS Corporate policies. The articles in this magazine are intended to be for general information only and should not be used as the basis for divestment decisions. BCMS Corporate, its staff and contributors do not accept any liability for any loss suffered by readers as a result of decisions made purely on the basis of the contents of this publication. Professional advice should be taken in relation to all divestment decisions. BCMS Corporate is a trading style of BCMS Corporate Limited. 3
  4. 4. BCMS Corporate• C r e d i t cr u n ch Company sales buoyed by credit crunch Relatively speaking mega-deals have all but dried up – the ‘credit-crunch’ though has had little impact on strategic acquirers seeking to buy smaller and mid-market businesses – demand is still very strong and business owners, having made the decision to sell, can be confident that their plans need not be postponed. 4
  5. 5. BCMS Corporate• C r e d i t c r u n ch R eading headlines dominating the national print media and listening to the reporting by broadcast media of the ‘credit- crunch’, anyone could be forgiven for the belief that the entire UK economy is about to hit the buffers. Business owners, based on this, might deduce that now is a bad time to sell a business; look beyond the headlines though and there is very good evidence that now is nevertheless a good time to sell. It would be wrong to dismiss concerns entirely and clearly we face some challenging times, some sectors are undoubtedly more vulnerable than others. It is important though to achieve some balance in reporting the wider health of the economy and the on-going capability of good businesses to finance growth, whether organic or acquired. dependant on debt, particularly and mid-market companies. This The mass media, largely based in those involving trade buyers and in isolation would at best only London, does tend towards a private equity which raised suggest that deals will continue to metropolitan view of the significant amounts of new happen, many of these potential Country’s economic well-being, money in the past few years, a buyers though are moving from heavily influenced by financial good deal of which is still to be NDA stage to meaningful services. The City of London has deployed. What debt is needed, meetings with our vendor clients, enjoyed an unprecedented boom the banks can get comfortable making competitive offers and driven largely by financial with and accommodate without progressing to completion – in services during which the the need for syndication fact the number of business sales fundamental rules of lending (bringing in other banks to share we are completing is up on what were effectively set aside allowing perceived risk). The vast majority was a very good 2007 for BCMS inappropriate amounts of debt to of these smaller and mid-market Corporate and its clients. finance inappropriate, transactions continue unnoticed, Deal-making involving strategic unsustainable activity – well below the radar of the buyers in the smaller and mid- compounding this over-lending, national media. market sectors is incredibly what has proved to be poor quality debt was then packaged The dearth of bigger deals will resilient and, in our experience, up and sold on by the original also most likely underpin interest remains in very good health. lender to other banks and in smaller and mid-market Smaller and mid-market investors. companies. This is reflected in companies and many active our own internal measures; here acquirers of all sizes, did not in The mortgage market at BCMS Corporate we track many the large part, binge on debt over experienced the worst excesses of different metrics but a key the last few years – they stuck to reckless lending but the larger indicator of the health of deal- the principles of good company acquisitions market, making is the number of signed governance, have healthy which has now experienced rapid non-disclosure agreements balance-sheets and the capability, contraction, was also fuelled by (NDAs) our ‘prospect generation when properly marketed, to easy access to debt. team’ receive from prospective attract buyers or to undertake Turning to the wider company buyers each month. The team is acquisitions. sales market however, the reality achieving record numbers [NDAs] is distinctly different. Smaller and reflecting this very strong See page 3 for Chairman’s comment mid-market deals are much less interest from acquirers in smaller 5
  6. 6. BCMS Corporate• D e a l co m p l e t i o n Nuclear knowledge attracts world leading acquirer A government announcement way the business generated relating to future nuclear considerable interest. In all 29 commitments led to significantly meetings were undertaken with increased interest in the industry. potential acquirers including all It was this which finally the major organisations involved persuaded the directors of RM in the nuclear power industry, in RMC Consultants directors Julian Hyde (left), James Consultants that the moment to the UK and internationally. McGuigan (second left), James Fitzpatrick (second right), Don Richardson (right) with Areva capitalise on their successful A range of offers were maximised management Alain Gauvin and Dominique Mockly. business had come. using the BCMS Corporate because we felt the overall offer After a steady stream of competitive bidding process with from Areva provided the best approaches from potential the eventual sale price option for the future of all our acquirers for a number of years considerably exceeding the staff.’ the directors suddenly saw shareholder/directors’ estimate Of BCMS Corporate he added: ‘I approaches increase dramatically for their business. would recommend BCMS over a three month period. ‘We As with many privately owned Corporate without hesitation. could see a great deal of change businesses, the directors were We were very happy, we are very happening within our industry also extremely concerned for the pleased.’ and the interest from outside future welfare of the staff who François-Xavier Rouxel, Senior parties in our business grew had helped build and sustain the Vice President for Strategy, of considerably. business. In view of this they acquirer AREVA, said: "The We realised this was an ideal time chose to accept an offer which acquisition of RM Consultants to sell our business and maximise combined a competitive price demonstrates our ambition to its value’ explained Managing with a close strategic fit. play an active role in the UK’s Director James Fitzpatrick. James Fitzpatrick said ‘The offers nuclear renaissance. RM The directors thoroughly were more than we initially Consultants’ expertise will allow researched the marketplace for expected and once past that point AREVA to offer solutions which potential M&A companies before our decision was very much are tailored to the needs of its deciding to enlist the specialist based on the future prospects for British partners.” assistance of BCMS Corporate to our staff and how they would be help them sell their business. treated. In the end, we chose the For the full interview with James Fitzpatrick Once the sale process was under second highest financial offer please visit www.bcmscorporate.com 6
  7. 7. BCMS Corporate• V a l u a t i o n Think of a number Whatever your reason for selling your business, getting the right advice is essential. Some advice though can be very unreliable, perhaps none more so than on the issue of when to sell and valuation. Delay and the risk of under-selling is a very real one for business owners. Seller beware is perhaps an appropriate maxim in these circumstances rather than the more familiar ‘Buyer beware’ T here are many reasons why method of valuation reduces it to owners want to sell their no more than a financial matter businesses but perhaps the most and produces a value based on common, certainly in our how many years a buyer would experience are: our business has take to recoup their investment if reached a plateau and to restart divided by historical [adjusted] the business growth-cycle profits – typically between 3 and requires significant investment of 5 years for privately owned time and money; I want to pursue smaller and medium sized other opportunities; my business businesses. We know at BCMS has become all-consuming; I used Corporate that this valuation to be an entrepreneur, now I’m model has significant drowning in a sea of red-tape and shortcomings, it fails to take regulation. These reasons are account of the unique nature of cited on a daily basis by our the business, its clients, the clients, reasons which can potential for growth, its market become frustrations and have the they have devoted many years to position and many other likely potential to impact negatively on building. benefits – any one or more of a business if not acted upon. these benefits will motivate the Unsurprisingly then, business right buyer. Experience tells us Owners invariably establish owners usually conclude that that buyer motives vary widely businesses closely related to their professional advice is needed to and have a significant impact on previous experience, decision- achieve their aspirations, it is appetite for a business and the making can be almost instinctive here that the choice of adviser price a buyer is willing to pay - in its infancy and as the business can have a profound impact on strategic buyers outbid ROI matures decisions are taken with the decision to sell and when. The buyers by anything from the reassurance of knowledge first step for many owners is to 40-250% for our client companies. gained and applied over many pose the question – what is my years. Despite this capability to business worth? The answer to make the right decisions for their this question will be used to business on a day-to-day basis, determine whether a sale of the The BCMS Corporate position is many of our clients admit to business makes financial sense; clear – matching the right buyer struggling with the decision to nothing at all wrong with this, with the right seller is critical to sell and the timing of an exit. provided of course, that the a maximised sale price. It is not This is in part, due to the lack of valuation truly reflects the worth possible to accurately value a reliable information on the of the business. subject, added to which, most business prior to marketing it owners will sell a business just Almost certainly, this question for sale simply because the once in the course of their will be answered by an adviser identity and motives of the working lives; this single relating value principally to the buyer are unknown. transaction is their once-in-a- previous performance of a lifetime opportunity to release business using a return on the value locked-up in a business investment (ROI) approach. This 7
  8. 8. BCMS Corporate•Client interview Learning to take a step forward Trevor Pinder, Managing Director of Provek Limited, a provider of unique assessment-led programme and project management solutions talks to i D E A L about his reasons for selling and how the sale process worked for him. (L-R) Shaun Reason and Heather White of HCS, Sunita Meigh from BCMS Corporate, Trevor and Mary Pinder of Provek W hy did you decide to sell Corporate people meant that I Will you have any involvement in your business? was very happy with the the business post sale and if not ‘I wanted to realise my assets to conclusion.’ what does the future hold for fulfil other life goals.’ How important was you? How did you find out about confidentiality and why was this? ‘Yes, I will be supporting the BCMS Corporate and why did you ‘Very – I did not want my staff or business for one or two days per select us to sell your business? customers finding out before I week for the first year.’ ‘Introduced by my solicitor.’ was comfortable to tell them.’ Would you recommend BCMS Did the sale process affect the Corporate’s services to another Did you consider any everyday management of your company considering selling? competitors of ours and if so why did you not use them? If you company? ‘Yes. The whole team were very didn’t consider any competitors, ‘Yes. This was a tough programme professional and I have already why not? of work and despite long hours it recommended BCMS Corporate to did impact at times, so it was one potential business seller.’ ‘Yes, I reviewed two alternative organisations. I selected BCMS important to minimize as many How satisfied were you with the Corporate because you presented risks as we could throughout the sale price and terms achieved? a sales approach to managing the sale lifecycle.’ ‘Very satisfied. It is always sale lifecycle of Provek rather Are your staff staying with the possible to see potential than presenting your approach company and was this an improvements but the BCMS as a list of contacts.’ important factor in the sale Corporate Deal Leader did an How did you feel the sale process process? exceptional job.’ was managed? ‘Yes they are staying and it was What is your overall opinion of ‘Exceptionally well. Not all very important to ensure the BCMS Corporate? straight sailing but the skills and ongoing growth and success of ‘A professional company, experience of the key BCMS the company.’ it puts the customer first.’ 8
  9. 9. BCMS Corporate• I n s i d e d e a l s Inside deals In this issue Deal Leader Glen Mallaby provides an insight into how skilled and experienced deal O management prevented inexperienced legal representatives potentially causing the breakdown of a sale. “ ur client, a manufacturer and service agent, chose to the express intention of working through a long list of outstanding use their own lawyer for the final issues, most raised by the stage of their sale process (against lawyers. During a three hour our advice) whilst the acquirer meeting the vendor and acquirer selected a friend with ‘corporate’ agreed all the outstanding issues, experience. The communications none of which they regarded as between the lawyers could at best constituting an impasse, and be described as poor and this finished the meeting by contributed to a protracted due instructing their lawyers to diligence process that seemed to complete the deal. be meandering towards failure. Although our clients and Additionally, the unnecessarily acquirers are entitled to use their lengthy legal process was own legal representatives, unless beginning to cause legal costs to they have experience in company spiral out of control. sale/acquisitions it invariably To avoid the deal failing at such a guarantees that the legal process late stage we called a meeting will become protracted - at worst between the acquirer and the this can cause the breakdown of vendor (excluding lawyers) with the entire deal.” BCMS Corporate• T e r m i n o l o g y e x p l a in e d What is due diligence? Q What is due diligence? market and larger company A : acquisitions involving millions of surveys, particularly where there pounds worth of consideration : Whether an intensive are potentially sensitive issues potential acquirers cannot afford belt-and-braces approach or such as environmental concerns to simply trust a vendor without a more limited investigation of or where the vendor’s business question. specific aspects of a companies may involve large physical stocks operations, due diligence is a Determined by the perceived of products. necessary part of concluding risks and, to a degree, dependent While there are no specific every deal. on the size and complexity of the criteria regarding who can or vendor’s business the due In the mergers and acquisition cannot undertake the due diligence process may be little industry due diligence simply diligence process for the potential more than all sides meeting and describes the process the acquirer, it is typically conducted examining all of the pertinent potential acquirers undertake to by appointed specialists who are issues and documents. On other verify the reliability of expert in particular key areas of occasions it may involve a sealed information provided by a vendor focus. These typically include room at a remote location where about their business and the pensions, property, human the potential acquirer studies all market in which it operates. resources and intellectual the appropriate paperwork over a Effectively, ‘Is the potential property. number of days. Finally due acquirer buying what they think diligence may also involve site they are buying?’ With mid- 9
  10. 10. BCMS Corporate• T a x a t i o n f e a t u r e Thinking of selling a company within your group? Consider this… Whether or not you are considering a sale, taking time to examine the impact your corporate structure can have on your tax liability I can be hugely beneficial writes Nitzan Cohen, associate and specialist tax lawyer at law firm Thomas Eggar LLP. f a company which is being Now that taper relief has been business. Arrangements include considered for sale is a abolished, an individual seller non-binding heads of terms and member of a group it may be may benefit from the any claims for the relief should necessary to transfer certain entrepreneurs' relief which be made before completion assets to or from that company reduces the capital gains tax otherwise the co-operation of the before the sale. Provided that liability, in respect of the first acquirer will be required. certain conditions are met, such £1M of qualifying gains, from •Any loans between the business transfers are generally tax 18% to an effective rate of 10%. and its shareholders or other neutral. Certain conditions need to apply members of the group should be for the above reliefs to be However, the timing of such repaid before sale completion. available. One of the conditions is transfers can have implications. that the relevant company or •Pre-sale dividends may need to Certain anti-avoidance provisions group is a trading one. You will be considered where the may apply on a sale of the need to ensure that any non- Substantial Shareholding business resulting in a charge to trading activities do not have a Exemption relief is not available, tax by reference to such earlier substantial effect on the as corporate acquirers are not transfers. This can include the company's or group's activities. taxed on dividends received from claw-back of previously claimed HM Revenue & Customs (HMRC) its UK members. Pre-sale stamp duty or stamp duty land consider 'substantial' as meaning dividends are not very effective tax reliefs. at least 20%. for individual vendors. However, Despite this there are statutory surplus cash in the business Other things to consider include: exceptions to the charge to tax should be distributed to and claw-back of the reliefs in •Group relief can result in a shareholders in order to avoid a certain circumstances. reduction in profits of the dispute with HMRC that profits Otherwise, any gains may be business, which in turn, results in are reclassified as capital gains, sheltered, rolled-over or, by way a lower corporation tax liability hence, avoiding the higher rate of of an election, transferred to for the business. Timing of the tax on dividends. Vendors will another member of the seller's sales will need to be considered need to convince HMRC that any retained group. as Group relief is only available cash left in the business is for accounting periods during necessary for working capital or Following a sale of the shares in which the relevant companies are other future trading the business a corporate vendor members of the same group. The requirements. As usual, anti- can avoid the charge to business will cease to be treated avoidance legislation may be corporation tax on chargeable as part of the vendor's group as triggered on pre-sale dividends gains if the sale qualifies for the soon as there are 'arrangements' so, as always, caution and early Substantial Shareholding for the change of control of the advice must be considered. Exemption relief. 10 12
  11. 11. BCMS Corporate• C a s e s t u d y BCMS Corporate instrumental in the sale of RTK RTK Instruments, a leader in the design and manufacture of process alarm products and related industrial instrumentation equipment to the power, process and utility industries worldwide has been U sold in a £multi-million deal. negotiation stages of the deal After negotiating with the various nlike most of our clients, were condensed into a shorter potential acquirers, the spread when Tim McLennan, time frame. The service created between lowest and highest offer managing director of RTK additional competition for RTK in this case exceeded 300%. Instruments engaged BCMS whilst maintaining the existing ‘There were times when I would Corporate to sell his company he interest. In total the deal duration simply have accepted a was already in discussions with was just 3 months; 39 potential ‘reasonable’ offer but Andy potential acquirers. The process acquirers were identified and Denny advised we reject it. With however was consuming so much initial discussions with 35 of three strong acquirers all of his time that there was a real them resulted in 10 Non- competing and bidding for my danger it would have a Disclosure Agreements being business I achieved a price far detrimental effect on business signed. higher than I would have operations. accepted.’ said Tim McLennan. ‘The discussions and negotiations The deal was lead by BCMS Corporate’s Andy Denny, ‘It was Summing up his experience of were already becoming time clear early in the sale process BCMS Corporate Tim said ‘The consuming, complex and lengthy that RTK was a strong whole process was managed and it made sense to let BCMS proposition,’ he said, ‘the sale is a confidently – much better than I Corporate manage this for me, very good example of what we could have done it. I think that leaving me to get on with can achieve for our clients to a removing the emotional element everyday management,’ he tight deadline.’ he added. from the negotiations is a great explained. ‘I had heard of BCMS advantage. Andy’s experience in Corporate many years ago and the sale process was critical.’ when their mailer was delivered promoting a seminar in Leeds I went along.” In light of the relatively advanced stage of discussions with some potential acquirers, speed was an important factor, ‘I didn’t want to spend more time assessing various M&A companies. The seminar provided a quick, simple and acceptable solution for me.’ The RTK project was a Negotiation only project for BCMS Corporate which meant that the research, qualification and 11
  12. 12. BCMS Corporate• F i n a n c i a l p l a n n i n g f e a t u r e Identifying your TM Magic Number If asked to value your most critical assets, how accurately could you do it? What does your personal balance sheet really look like, and how will it influence the future you build for you and your family? Stefan Wissenbach, CEO and founder of The Wissenbach Group explains the unique Magic Number™ concept and H illustrates why you should know yours. ow often do you make a will influence their Magic Number™. decision that impacts Put simply, your Magic Number™ upon your business? is the amount of accumulated Every day probably. How often wealth you need in order to be do you make decisions about financially independent, enjoying your finances that transform the your desired lifestyle, for the rest way you manage them? Perhaps of your life. Identifying your not as regularly. And how often Magic Number™ and creating a they die, written down in the do you feed all of these factors Really Effective Financial form of a will, then it does seem into a master plan that takes into Strategy™ is a unique process slightly back to front! account where your business is that we have developed here at We all know that objectives with today, where it will be tomorrow The Wissenbach Group, and it is benchmarked progress points are and how all of this will shape the changing the way our clients look far more likely to materialise future for you and your family? at finance, business and their than intangible, abstract goals – What we usually find is that futures. Your Magic Number™ that’s the whole point of business business owners can and vision of your desired future plans. But a simple business plan, communicate quite comfortably should guide every major or exit strategy simply isn’t how much their property is worth financial decision you make and enough. You must be working to and how much they have in the it takes into consideration every a holistic financial strategy that way of savings and investments. aspect of your life – far beyond takes into account your personal Valuing their business provides a your finances, from where you goals alongside your business somewhat greater challenge, as wish to live, where your children objectives. How can you make more often than not, the will be educated and the kind of day-to-day or even life-changing traditional, conventional lifestyle you lead for the rest of business decisions without valuation methods fall short of your life. understanding the impact they providing an accurate figure. Of And why do you need to plan to have on the big picture and your course the often used maxim that this extent? I’m often surprised overriding aspirations for you your company is only worth what by how many people don’t have a and your family? someone will pay for it still rings written plan for their lives. Their Understanding how to value and true, but thankfully, specialists plans are top level, big picture, manage your assets is of such as BCMS Corporate can and usually exist purely in the paramount importance – but it is ensure that figure is as high as minds of those who make them. only the first step. Moving from possible. Which might sound perfectly your current situation to the Where most business owners lack normal, but when you consider future you dream of, is about insight is in how these crucial that most people also have a starting with your Magic assets fit into the big picture. And comprehensive, prescriptive plan Number™ and implementing a even more importantly, how they for financial management after strategy that will close the gap. 12
  13. 13. Only then can you truly For more information on The understand the implications of Wissenbach Group and how you every decision you make for your can find out your own Magic business, your finances and your Number™, please visit family. What’s more in the fast- www.wissenbach.co.uk moving, ever-changing world we or call Allyson McAlister live in, it’s an essential tool for on 01676 524 460. those who wish to make maximum progress in the minimum time. BCMS Corporate• Q u e s t i o n s a n s w e r e d Your questions answered In each edition of our magazine a senior member of our management team will be addressing one of a number of the most common questions we are asked by our clients. In this edition Kate Carty, Operations Manager answers a fundamental question about our refreshingly different approach. Q : You state that the business. For example, a business ‘traditional’ method of may also have a stable customer selling a business is flawed and base, a long history of successful yet it has worked successfully for trading, a loyal customer base, decades. How can it be flawed if blue chip clients, long term so many businesses have been contracts, low staff turnover, A sold using this method? ownership of valuable : It can be very simple to sell intellectual property, a strong a business if maximising the and positive brand name, etc. sale price is not an issue. I am All of these assets of the business sure Alan Sugar could sell his have a value but without actively business empire tomorrow for a marketing them the value to an (relatively) paltry £500m for acquirer will never be known. A instance! If the fact that in the company sold without promoting marketplace an acquirer may be these valuable assets is a willing to pay £800m+ was not an company that is undersold. It is issue then I am sure he would be a cornerstone of our entire very happy. Traditional valuations take the process that each and every However, business owners all most recent historic financial business we sell has all the above expend a huge amount of time, performance of the business and assets (and more) proactively money, commitment and sheer apply a multiple to its (adjusted) marketed to each potential hard work on their businesses to profits. The resultant figure is the acquirer and it is this that is a grow them and make them ‘value’ of the business and significant factor in ensuring we successful companies. After what indicates how many years it achieve maximum value. for many is a lifetime’s work it is would take an acquirer to regain not unreasonable for them, when the monies that they invest. selling, to want to achieve the The tragedy of this style of absolute maximum value for their ‘valuation’ is that it takes no If you have a question you would like answered efforts. account of all the assets of the please email it to ross.meigh@bcmscorporate.com. 13
  14. 14. BCMS Corporate• I n t e r n a t i o n a l International news The success of our refreshingly different approach to selling businesses for their maximum value is spreading globally and we now have offices operating in North America, Scandinavia, Turkey and Latin America. B T T Turkey Scandinavia North America CMS Corporate in Turkey he highlight of the summer o manage the rapidly recently celebrated its 35th was the sale of Protector AS to spiralling demand from a raft seminar held in Istanbul. The ever VSP Holding AS in Norway. of new clients our American office popular seminars attracted, co- Protector AS is a highly has recently relocated to a new incidentally, 35 business owners specialized company working on 6,000sq/ft office on the from around the capital, all solving problems concerning prestigious Broad Street, looking to sell their businesses for corroding concrete structures, Manhattan. In addition to maximum value. with a focus on cathodic increased office space and protection. meeting rooms for both client The importance of selling for Jarl Yrwing, manager of BCMS meetings and business operations maximum value was also Corporate’s Norwegian office said the office also features state of the recognised by Family Business ‘Through this merger the new art communication systems which magazine, itself part of Turkey’s joint company, with a turnover of includes a live video link system. national Economist magazine £16 million, will increase its Whilst the significance of the group, as they published a competitiveness for larger location of our office may not be lengthy article entitled ‘Don't let maintenance assignments through obvious to many non-US citizens them grab the control as you sell increased capacity nationally and it is next door to the World your company’ after attending a internationally. We are very famous New York Stock Exchange BCMS Corporate seminar. pleased to have shown again how in the heart of Manhattan’s successful our process is.’ financial district! Bob Goldsmith, President and CEO of BCMS Corporate in the US commented ‘Our New York office has moved just a short distance but our US operations have continued to expand much further afield, from here in Manhattan to the mid-Atlantic region. We are now hosting seminars in many more locations leading to the opening of additional offices to keep pace with demand. A Texas office will be up and running by the end of the year.’ 14
  15. 15. BCMS Corporate• P h i l a n t h r o p y Philanthropy “Do what you can, with what you have, where you are.” Quote on philanthropy attributed to S Theodore Roosevelt It never ceases to impress us how much of The Matt Hampson Trust porting clubs have a long tradition of association their time many of our staff and indeed our with charitable causes and Basingstoke Rugby clients devote to community and charitable Club is no exception. The club, of which BCMS causes. Corporate deal leader Glen Mallaby is a youth In each issue of i D E A L we will highlight just coach, has raised over £2,000 for an injured some of the community and charitable Leicester player, Matt Hampson, who has been activities our staff are engaged in together paralysed after breaking his neck during a game. with details of some of the charitable In addition to the money raised by the Club, BCMS projects BCMS Corporate as a company also Corporate and a number of clients also contributed participates in. to the fund. Despite the terrible injury suffered by Matt, he is an inspiration to many, working tirelessly to raise funds for spinal research and he M Bangalore orphanage continues to promote the sport to which he is so uch of what BCMS Corporate is involved in dedicated. For more information please visit takes place in the local Berkshire community. www.matthampson.co.uk However, one exception is the work of “The poor T and needy benefit trust” a charitable trust Interview preparations for school leavers established by the directors of BCMS Corporate to he interview process can be a daunting one for assist people in the Indian cities of Kakinada and even the most experienced of us but for the Bangalore. employees of tomorrow, currently nearing the end of their education, an interview is also step into the One of the earliest projects for the Trust was the unknown. An interview for a first job can often be building of an orphanage in Bangalore which now as disappointing as it is exciting without the skills houses twenty girls aged between three and ten. and experience to perform well. In view of this staff The trust accepted the long-term responsibility for at BCMS Corporate now provide interview training educating, feeding and clothing the children, as programmes for Year 10 pupils (aged 14) at two well as providing support for full-time carers. BCMS local schools. Pupils are required to learn about the Corporate chairman Brian Rebbettes explained the company and select a role that they wish to be life previously endured by the youngest child now interviewed for. Interviews take place either at their resident in the orphanage: “All the children have school or the BCMS Corporate offices in Kingsclere. been rescued from horrific conditions. One three Training and Development Manager Tracey Denny year old, for example, was abandoned naked on a said. ‘The interviews help identify the strengths of refuse dump where she lived alone for six months the pupils and provide them with an early surviving on whatever scraps of food she could indication of the type of roles they may wish to find. When rescued she was full of worms and pursue in their future careers. We provide feedback covered in lice. She is now, eight months later, well and advice for each of the interviewees to help fed, lively and loving her new ‘family’ at the them prepare for their first real interviews’. To date orphanage.” ten interview sessions have been completed with The Trust has also ensured that a seven year old pupils and more are scheduled throughout the girl from the orphanage was able to have a vital eye year. operation, saving her sight. One of the care workers at the orphanage also underwent life saving heart surgery again financed by the Trust. 15
  16. 16. BCMS Corporate• D e a l hi g h l i g h t s SOLD: Nuclear risk management consultancy. Sale price: £9,000,000 Price maximised by: £6,500,000 Deal highlights SOLD: Installer of ground source energy systems. Sale price: £9,000,000 Price maximised by: £7,500,000 Our refreshingly different approach to the sale process continues to generate successful sales and below, for your information, we have SOLD: Cleaning detergent manufacturer provided a small number of recent deal highlights. The companies Sale price: £5,000,000 we have successfully sold come from a wide range of industries Price maximised by: £3,000,000 and have all been sold for maximum value. SOLD: Designer and builder of water & wastewater treatment systems. Sale price: £5,200,000 Price maximised by: £2,700,000 Our process drives the sale price ‘Price maximised by’ figure shows upwards through a combination the amount our process improved SOLD: Manufacturer and supplier of of carefully selected potential the price by over the lowest bid household laundry and cleaning detergents. Sale price: £5,000,000 acquirers and a competitive received. In these examples we Price maximised by: £3,000,000 bidding environment. This generated a total of £26,820,000 maximises each sale price; the more for our clients! SOLD: Maintenance service provider to facilities management industry. Sale price: £3,800,000 Price maximised by: £1,300,000 SOLD: Distributor of fasteners, fixings and ancillary products. Sale price: £3,400,000 Price maximised by: £1,400,000 “ SOLD: Chemical manufacturer. Sale price: £1,300,000 Price maximised by: £650,000 SOLD: Refrigerated vehicle conversions Sale price: £1,070,000 Price maximised by: £770,000 ” ‘I would just like to thank you for all of your efforts and the very professional way in which you drove the sale of my business to completion….I really appreciated your support to me during some of those ‘exciting’ times. Your negotiation skills and experience through this process were excellent – very much appreciated…THANK YOU ALL FOR A GREAT JOB DONE.’ – Trevor Pinder, Provek. A full transcript of this can be found at www.bcmscorporate.com BCMS Corporate Plantagenet House Kingsclere Newbury Berkshire RG20 4SW T: 01635 296191 F: 01635 299502 E: info@bcmscorporate.com www.bcmscorporate.com

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