What to expect when
selling your business Selling your business will be one of the most significant events of your career. Years of hard work will hopefully be coming to fruition. Julian Harvey, corporate partner at Penningtons Manches LLP, outlines some of the key considerations for owners of small businesses
Professional advisers
The right professional assistance to guide you through the sale process is essential from the start. Experienced and specialist advisers – including solicitors, corporate finance advisers and accountants – will not only make the process and negotiations easier, but will be able to spot potential issues in advance and tackle them long before they become costly problems or delays.
There can be significant tax implications in selling your business. Proper planning and structuring of the transaction with tax advice from specialist accountants early in the process can ensure that the transaction is as tax-efficient as possible.
Heads of terms
Heads of terms will normally be entered into by the parties, setting out the key terms of the transaction at its outset. They constitute a non-legally binding document, and provide a reference point for negotiations to prevent misunderstandings throughout the transaction.
Confidentiality
As part of due diligence, the buyer will examine your business with a fine toothcomb. Before any information is given to the buyer, you should seek to enter into a confidentiality agreement to ensure confidential information so that your business is protected.
Even knowledge that your business is being sold can have a detrimental effect on your employees, suppliers and customers. A well-drafted confidentiality agreement will protect your business in the event the sale falls through, and offers you recourse in case information is leaked.
Due diligence
Due diligence involves providing the buyer with information about your business and answering any follow-up questions. It is often the most time-consuming part of a sale. With guidance and assistance from your chosen professional advisers, preparation of the necessary information from the beginning can save you time and money.
Barclays injects £100m into fast- growth technology companies
In a UK first, Barclays is launching a new £100 million fund to help fast-growing technology businesses accelerate to the next level.
The new drive will see the bank backing some of the most innovative UK technology businesses with lending of up to £5m, repayable over three years.
Until now, this type of lending has not been widely available to UK businesses, whereas their US counterparts have been able to grow rapidly through access to debt finance.
Because fast-growing technology firms develop much more rapidly than the 15-year average of traditional businesses, they stand to benefit from new access to debt finance, as an alternative to selling equity. This will also allow leading entrepreneurs to retain control of their
company‘s development and concentrate on accelerated growth.
A recent report by Barclays showed that UK technology businesses are expected to grow four times faster than GDP in 2015.
Launching the new fund, Ashok Vaswani, chief executive of Barclays personal and corporate banking, said: ”This new fund offers a welcome boost to growing UK technology firms, and will provide a catalyst for their development into larger companies.
It is part of our
plans to deliver the kind of pro- growth financial backing for UK business that US firms already enjoy.
”We identified a significant gap in the traditional way technology businesses were financed, and with this new drive we will be truly able to
THE BUSINESS MAGAZINE – THAMES VALLEY – JUNE 2015
support businesses right from their inception.
”Entrepreneurs and SMEs are the life blood of the UK economy and the technology sector is an incredible incubator for many of these individuals and businesses.”
Sean Duffy, managing director, Barclays‘ technology, media and telecoms team, said: ”Fast-growth technology companies in the US have long been able to access debt finance early in the life cycle, and some of the most successful US technology firms, including Facebook and Google, have grown their businesses with help from this type of funding.
”We believe it is important for fast-growth technology companies in the UK to be able to access a similar range of financing solutions.”
corporate finance 25 Legal documentation and liability
Under the sale and purchase agreement with the buyer, you will be required to give a number of contractual statements of fact relating to the business. These are warranties and to protect your position and limit your liability as the seller, your legal adviser should go through them carefully with you to allow you to inform the buyer of all circumstances in which the warranties are untrue, so that no breach of warranty claim can be made by the buyer on those grounds.
After the sale
You will now be embarking on the next episode of your life. Whether retiring or looking to invest further, you should obtain financial planning advice as early on in the sales process as possible to utilise the sale proceeds to their best effect.
Details: Julian Harvey 01483-791800
julian.harvey@penningtons.co.uk www.penningtons.co.uk
Procam advised by HMT LLP
HMT LLP, led by partner Paul Read, has undertaken due diligence for private- equity-backed television equipment specialist Procam Television on its acquisition of US-based camera rental company HotCam New-York.
Procam, headquartered in London with additional facilities in Manchester, Scotland and Leicester, and backed by specialist private-equity firm Foresight Group, provides camera equipment and crew to many of the largest broadcasters, production companies and blue-chip organisations in the UK. Notable customers include BBC, ITV and BSkyB.
HotCam New York was established in 2004 by sound mixer Trevor Hotz and partner Ali Grapes, as an off-shoot of HotCam UK. The company has a long list of high-profile US shows to its credit, including The Tonight Show, American Pickers and Teen Mom.
The strategic purchase was led by Procam’s group CEO John Brennan and backed by private-equity firm Foresight Group.
www.businessmag.co.uk
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