24 DOING THE DEAL


Ryan Bilsborough, PM+M Ryan is corporate finance manager at Lancashire based accountancy firm PM+M.


I primarily advise vendors in a selling company. Effectively what we try to do is manage the deal where price and structure is the key.


There will probably be an element of deferred consideration that’s due, maybe one, two or three years after completion.


At the point of sale you’ve relinquished control, you’re no longer responsible for the business, but you effectively become a steward of the business over the next few years to ensure that it is performing as it should. This typically would be a handover period and it’s a case of looking after and maintaining the culture of the business,


because immediately after completion is a very critical and vulnerable time.


Staff are a little unsettled. Customers could be unsettled. You’ll have rival businesses in your arena trying to poach staff, take customers off you, and it’s a case of just settling the ship, communicating with everybody that everything’s safe and, ‘This is what we’re trying to achieve’.


It’s business as usual, maintaining the momentum at a time when the exec team is probably overcommitting resource in trying to integrate these businesses together.


When it comes to the transaction process it is a case of explaining to them that though they are feeling the pressure and are stressed, the buyer is feeling exactly the same, because they’ve looked at time on the clock, they’ve put a lot of cost and investment into doing this deal. You have to recognise this and that you’re both working to the same goal.


When you’re selling a business the power is very much with the seller up until the heads of terms stage. We’re bringing buyers in, we’re trying to drive that price as high as we can and get the structure right.


As soon as the heads of terms are signed, we’ve entered a period of exclusivity, we have to disregard all the unsuccessful bidders and that’s where the balance of power starts to equalise between the seller and the buyer.


From an advisory point of view, we can then flip into value-protection mode and as we move through the sales process it’s a case of protecting and making sure there’s no price-chipping or anything like that which could diminish the value throughout the course of the deal.


Matt Currie, Seneca Partners


Matt is investment director at Seneca Partners, which has a diverse investment portfolio encompassing both private and AIM quoted UK companies in a range of sectors.


I work predominantly on early-stage funding and we are involved in quite a lot of buyouts as well at the lower end of private equity and the mid-market landscape.


We will be quite involved in those businesses post-completion, so a lot of our money is going in to grow them.


We’re coming in to work with these people, and there’s recognition it might not be the perfect deal on the way in, but we’re there to help them get to that perfect deal as growth capital funders.


These people are experts in their field and I wouldn’t dream of pitching up and telling them how their business runs and specifically how to grow it.


But we’re there to put the pieces in place to help them achieve what they know that business can achieve and then handhold them through to it, whether it’s an exit or a re-finance or going into a larger corporate, whatever the potential future looks like for them.


We’re there to help on that from a funding perspective but from an advisory perspective as well.


What people miss a lot of time is that fundamentally there’s someone who’s prepared and happy to pay quite a lot of money for these businesses.


People like us sit in a room for weeks and months on end discussing risks and what’s going to go wrong, what the issues are going to be, what this business is going to look like in six to 12 months and how much of a mess it’s going to be if we don’t do this and this and this.


But there are two people here who are getting in a room together because they believe in what this business is doing and that it can do it bigger and better things going forwards.


So it’s just a case of us as advisers keeping that belief and momentum, and if there is a deal there to be done, holding hands with everyone to get it over the line.


Chris Howard, CFO Centre


Chris is an experienced finance director, business advisor and mentor working with the CFO Centre, which provides part time FDs and chief financial officers for businesses.


When it comes to integration after a deal a lot of businesses I’ve seen try and implement and not integrate, and that’s where you start to hit problems.


It is making people psychologically safe and taking not only the owner on this journey that they’ve potentially never been on before, and don’t know what’s coming, but also the people in the business as well and supporting them through it.


It’s not a case of, ‘We’ll stick around, sign the documents, and off we go,’ we’ll also support the business through and beyond.


We’re heavily people focused, but we make sure that the numbers matter and the numbers drive in the right direction.


The final piece to mention on integration is time. These things will always take longer than you ever plan for and ever believe.


It’s making sure that you set up the time and don’t give yourself hard stops of when you expect things to happen because they won’t happen by then.


During the deal you sometimes need to push back on your advisers. You actually need to say, ‘Thanks for the recommendation but I’m going this way’ and, ‘Well thanks for all the risks you’ve pointed out, but we’re doing this deal anyway.’


I’ve just come off the back of a deal where the price was fixed and yet the advisers were still highlighting risks all the way through.


You’re on the eleventh-hour, risks being highlighted and the warranties are growing, and you’re thinking, ‘But the price is fixed. Just move on with it and let everybody get through it and get on with the important part.’


And that is actually bringing the two businesses together and making sure that everybody gets what they want and comes out of it with a win-win and not feeling like they might’ve been cheated or that they’ve been poorly advised, because that’s what nobody


around the table wants at all.


Benjamin Dredge, CG Professional Benjamin is a managing partner at law firm CG Professional and heads its corporate services division.


A good adviser is not going to necessarily be focused entirely on completion and getting the deal done.


It’s about making sure that if you’re doing a due diligence exercise, particularly a legal one, it will not be about trying to find reasons not to do the deal, but identifying risks and coming up with, ‘Right, let’s have a plan’.


It is not just ‘let’s try and get the deal done’ but what happens after the deal is done and how a problem can be solved or risks mitigated, rather than, as can often be the case, coming up with a reason not to do the deal or to price chip. Ideally you want a business that is open to the fact that there are some problems and proposals to deal with them.


Then at that stage you advise your client and manage it through, rather than just focusing on getting the deal done by the end of the week and then on


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