corporate finance 45 Disposals – preparing a
business for sale Preparing properly for the sale of a business, results in a more predictable process. Thinking about when and how you wish to exit will dictate your strategy and approach, writes Kirsty Sandwell, M&A and private equity partner, Baker Tilly
The earlier preparation is started the more likely the outcome will meet your expectations. The minimum recommended time is 6-12 months but optimum planning would start 3-5 years before an exit.
Start with an appraisal of your market and then review your business against financial and non-financial critical success factors. This will highlight the action you need to take now to achieve the optimum outcome in the future.
Do you do clever things? Most owners struggle to answer this question when we ask them what is special about their business. Intellectual property ownership is an obvious starting point. You should also consider how your business processes may be more efficient than
competitors and how your route to market may be unique in your sector.
Are you operating in an attractive sector of the market? Market attractiveness refers to factors such as high growth, barriers to entry and low levels of competition and price elasticity. If you are already established in attractive sectors, maintain focus. If you are not, then consider how to develop the business to alter your market positioning.
Is your financial performance and position as favourable as it could be? Planning ahead helps you to avoid quick financial fixes and can aide decisions that benefit long-term financial performance. Effective working capital management can mean more cash out for you on exit.
B P Collins proves to be an asset in Biffa acquisition
Full-service law firm B P Collins LLP has helped the UK’s leading integrated waste management business, Biffa Waste Services, to acquire a majority of Shanks Waste Management’s UK solid waste business.
The Thames Valley-based law firm advised the Buckinghamshire-based waste and recycling company on its acquisition for £9.5 million.
The acquisition includes the transfer of 11 waste transfer facilities in England and Scotland and around 300 employees will transfer to Biffa.
The transaction, which is subject to regulatory approvals, is due to be completed by the end of December 2013.
The transaction team, drawn from B P Collins’ corporate and commercial, employment and commercial property practices, was led by partner, Alex Zachary, who commented: “We are delighted to have helped Biffa further consolidate its position as a UK market leader in solid waste.”
Ian Wakelin, CEO of Biffa, added: “This acquisition will enable us to leverage our national infrastructure, grow our market share and enhance our leading industrial and commercial services. It is a progressive move for Biffa in line with industry trends towards consolidation to match waste volume levels. Biffa has a strong platform for growth based on its reputation for excellent customer service and its infrastructure. We are pleased to be able to continue to invest in the business and enhance our position at the forefront of the evolving waste management industry.”
He continues: “We really value our long-term relationship with the B P Collins team which, once again, provided outstanding support and played a crucial role in the success of this complex project.”
B P Collins is top ranked in Chambers UK 2013 for environment in the Thames Valley region.
Details:
www.bpcollins.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – DECEMBER13/JANUARY14
www.businessmag.co.uk
Have you considered the quality and distribution of your revenue? All buyers want consistent growth, contracted clients, recurring revenue and a well-diversified customer base. The degree to which you can deliver this will depend on the business and sector. Consider these factors when you take on new work and develop new products or services.
How useful is your management information? Timely, accurate financial and non-financial information is important to demonstrate trends to buyers and substantiate forecasts. Track KPIs, prepare monthly management accounts, keep a detailed asset register and ensure that you can demonstrate customer-based
statistics, such as retention and relationship duration.
Does your business have dependency on customers, suppliers, products and people, including you? Dependency increases the risk to a buyer and reduces value or favourability of terms for you.
Do you have the right people for the job? Good advice pays for itself and then some. Consult with accountants and tax advisers and form a relationship with your preferred corporate finance adviser.
Remember, the conclusion of a deal may not mean the conclusion of your involvement. Very few deals are done with all cash out on day one. Most deals are structured as a staged exit or include some form of earn-out. The more thorough your preparation, the more likely it is the business can be easily transferred, with the shortest possible transition period. Start preparing now.
Details: Kirsty Sandwell 01293-591727
kirsty.sandwell@
bakertilly.co.uk www.bakertilly.co.uk
At Herrington & Carmichael LLP we believe in the traditional values of excellent service and value for money. Our clients appreciate our proactive and friendly approach to all their legal concerns. This is why we are a leading law firm for business and private individuals in the Thames Valley region.
We have specialist teams to help with all your legal
♦ Company & Commercial ♦ Employment ♦ Dispute Resolution ♦ Debt Recovery ♦ Real Estate
Plus all aspects of Private Client law including Wills, Probate, IHT, Residential Conveyancing and Family issues
Waters Edge Riverside Way Watchmoor Park Camberley Surrey GU15 3YL Tel: 01276 686222
27 Broad Street Wokingham Berks RG40 1AU Tel: 0118 977 4045 Email:
info@herrington-carmichael.com
www.herrington-carmichael.com
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