60 DOING THE DEAL
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He says the market is buoyant adding “good businesses will always attract attention.” And he picks up on the subject of value adding: “The reality is American businesses trade at 23 times earnings and UK businesses trade about 13 times earnings at plc level, so assets look cheap.”
Lancashire’s business culture is also playing its part, according to the experts. Stephen Robinson, corporate finance director at PM+M, says: “When it comes to a lot of Lancashire businesses, they can be relatively conservative in terms of whether they want to add excessive amounts of debt, they tend to want to grow more organically and more conservatively.
“There is often a real focus on the bottom line, what makes money, what makes margin.
“It’s pretty old school and that adds to the attractiveness when it comes to selling to overseas buyers. It is that straight-talking and buyers like that.”
Richard Robinson, corporate law partner at solicitors Napthens, adds accessibility to the list of what makes businesses in the county attractive acquisition targets.
He says: “You can get a plane to Manchester Airport which is a factor. If you’re a business in the Mid-West in America, you can find us on a map which is actually quite important to a lot of businesses.”
Richard also believes that Lancashire has traditionally been “a little bit under advised”. He adds: “It is a little bit quieter in terms of how
it talks about its business environment and is less familiar with private equity.
“There are a lot of people who don’t understand the options to them in terms of different types of deals.
“We also have some ‘hidden gems’ in Lancashire. The number of times you find you’ve got a £100m business four minutes away from your office on an industrial estate. There are some unbelievably brilliant businesses hidden here.”
Laurence O’Connor, managing director of Burnley based business advisors Financial
business Star Tissue. Following its sale to a German based company earlier this year he has retained his role as managing director in the operation, which is now trading as WEPA Professional UK.
He believes the company’s culture played a big part in sealing the deal, which was completed earlier this year. He says: “We were purchased by another family business, third generation.
“One of the reasons why they purchased us was we were also an independent family business and they liked the culture within Star Tissue in terms of how the team worked together and
In terms of Lancashire as a market, look where we are. We’ve got great infrastructure, local
networks, we’re close to the big cities, there’s a nice mix of new business but ‘old’ economy as well
Affairs, says Lancashire’s “hardworking traditional values, backed with some really positive innovation” creates an attractive proposition for investors.
He adds: “We’re in financial planning and insurance. Our market has always been buoyant and will continue to be so.
“A lot of acquisition activity in our industry has been driven through private equity houses in the UK and Europe and now we’re seeing American houses coming into the market.”
Khalid Saifullah’s father founded Blackburn
FINANCIAL PLANNING IS ESSENTIAL WHEN ‘DOING THE DEAL’
Whether you are buying or selling a business, a financial planner is a key addition to your team. They can provide advice and guidance throughout the lifetime of your business journey.
Buying
A financial planner, working together with your accountant, can help you to assess the financial health of your prospective acquisition. It’s the same with any purchase, a car may look lovely and shiny on the outside, but what does the engine look like? It’s no different when looking to buy a company.
Once you’ve completed your purchase a financial planner can help you to protect your assets. No one wants to think about worst-case scenarios, but planning for them is essential. If a key person in the business can’t work due to illness or worse, the survival of your business may be at risk.
We can help put protections in place to ensure your business continues to thrive,
in-service benefits for employees, but specifically designed for small businesses.
We can also help mitigate business taxes, by maximising your pension contributions from business profits to plan for the future.
Selling
Mike Clarke, Chartered financial planner
using one or a combination of the following:
• Key Person Cover: Protects the business if a key employee or director becomes seriously ill or dies.
• Shareholder Protection: Can provide the funds to re-purchase shares and help prevent dispute with potential beneficiaries.
• Relevant Life Cover: Similar to death-
Know your numbers... many people, go through life and blindly hit a point when they start to think how much they need in retirement. We can help and guide you to work out ‘your number’, by understanding what your retirement goals, dreams and aspirations are.
When it comes time to retire, what will your exit strategy look like? Will it be a full sale, or will you retain shares for an income in retirement, stepping down from the day to day?
By working through these types of questions with a financial planner and understanding your desired outcomes, you can make sure that when the time comes, your exit is smooth and tax efficient.
01257 260011 |
enquiries@amberrivertb.com |
www.amberrivertb.com how we service customers.
“It was very similar to how they did business, so that was the easy part. The challenging part is working in a bigger group, the company has 14 sites across Europe, in France, Poland, the Netherlands, UK, Italy. It is a learning opportunity.”
Khalid adds: “When you’ve got different cultures collaborating you always get a better outcome, because you’ve got more learning and more experience coming together.”
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