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Preparing your business for sale post-Brexit
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Preparing your business for sale post-Brexit Given the uncertainty created by Brexit and the imminent triggering of Article 50, owners looking to dispose of their business could be forgiven for thinking that the brakes would have been put on any decisions by potential buyers resulting in a slow-down of business sale transactions.
John McDermott Solicitor | Corporate john.mcdermott@laytons.com +44 (0)161 214 1600
Barney Leaf Partner | Corporate barney.leaf@laytons.com +44 (0)161 214 1600
Preparing your business for sale post-Brexit | March 2017
Strategy However, that is not necessarily the case. Yes, there is some understandable caution amongst banks and investors, but this has only really resulted in lenders being a bit more stringent in their lending criteria. It does not mean that door has been shut completely. The following tips should help to ensure your business remains attractive to potential bidders despite these uncertain times.
The general consensus amongst investors is that a buyer is more likely to go ahead with a deal which fits with its overall strategic objectives. For instance, a manufacturer of certain goods may be an attractive target to a distributor operating in the same market looking to build or increase its manufacturing capability. A business which “completes a jigsaw� for a buyer can remain an attractive proposition, despite challenging external circumstances. To that end, try to think about your business from the perspective of a potential buyer. Why would a potential buyer want to buy you instead of one of your competitors? What opportunities does your business present that you can emphasise? Which areas of your business need some TLC or modernisation in order to make you more attractive?
Personnel This follows directly on from the above point. Taking an objective, rational view of your business from a perspective of a potential buyer, do you have the right people working in the key positions? Getting the right management team on board is key to steering your business in the right direction – both to achieve the financial performance necessary to catch the eye of potential buyers, and also to ensure that you have in place a management team with credibility and experience that will inspire confidence in those same bidders during any initial discussions or diligence process.
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Preparing your business for sale post-Brexit | March 2017
Modernisation
Scale
Is your firm up to speed with the digital age? Do you have an
If your business is an SME, don’t assume that investors or
online presence and up to date payment and delivery service
buyers will not be interested. Small to mid-range deals
methods?
actually account for the vast majority of M&A transactions. If your business is profitable and well-run, it could still be
You don’t necessarily need to have a super-slick, cutting-edge
attractive regardless of its size.
digital offering, it depends on the industry sector you operate in; if you operate a retail company then yes you do, but if you operate a traditional B2B business then possibly not, but if you have taken steps to ensure that your business can adapt and operate virtually this will make it more attractive to
Horizons
investors, as it indicates future revenue streams and that less money will be needed post-deal to make the business fit for
Finally, the comparative weakness of the pound at the
purpose.
moment could actually represent an opportunity, as it could represent better value for overseas buyers or investors. Therefore, it may be in your interests to look overseas as well
Interim investment and control
as in the U.K for potential bidders.
We have a wealth of experience in shareholder instructions at all stages of the business life cycle, from inception to exit. If we can assist you in any aspect of your business
Consider seeking development capital investment. This could
please contact John McDermott on 0161 214 1600.
help improve the scale of your business and its financial performance. Don’t be averse to offering equity in return for development capital or the hire of a key person. Whilst relinquishing some control can be daunting, it can sometimes be a hugely positive step which helps to bring in the key performers, funding and scale needed to steer your business towards a sale.
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Our Team Cameron Sunter
Barney Leaf
Partner | Corporate cameron.sunter@laytons.com +44 (0)20 7842 8000
Partner | Corporate barney.leaf@laytons.com +44 (0)161 214 1600
Kathryn Beasley
Rupert Lescher
Solicitor | Corporate kathryn.beasley@laytons.com +44 (0)20 7842 8000
Consultant | Corporate rupert.lescher@laytons.com +44 (0)20 7842 8000
Ben Crichton
John McDermott
Solicitor | Corporate ben.crichton@laytons.com +44 (0)20 7842 8000
Solicitor | Corporate john.mcdermott@laytons.com +44 (0)161 214 1600
Patrick Curtis
Daniel Oldfield
Partner | Corporate patrick.curtis@laytons.com +44 (0)161 214 1600
Partner | Corporate daniel.oldfield@laytons.com +44 (0)20 7842 8000
John Egan
David Sefton
Associate Partner | Corporate john.egan@laytons.com +44 (0)20 7842 8000
Consultant | Corporate david.sefton@laytons.com +44 (0)161 214 1600
John Gavan Partner | Corporate john.gavan@laytons.com +44 (0)161 214 1600
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