PREPARATION BEFORE A SALE PAYS DIVIDENDS by Paul Matthews
Head of corporate and commercial team, WHN Plan ahead
Any buyer will likely raise due diligence questions to satisfy itself as to the value of what it is buying.
Being ready to respond to the due diligence questions efficiently creates a positive impression.
Review the affairs of the business with your professional advisers well before accepting an offer so you can identify and remedy any issues.
For example, do you have signed contracts with all your employees? How about signed contracts with customers and suppliers? Are any assets subject to charges which need to be released?
If selling part of a business, consider what is required to separate the two parts and whether any transitional arrangements are needed for shared resources.
If issues only emerge once the transaction is proceeding, resolving them may delay or derail the transaction. Preparation pays dividends.
Take professional advice
To ensure it doesn’t encounter any unexpected issues, the buyer will likely require the sale contract be prepared by its solicitors.
Drafts of such contracts are often unduly buyer-friendly and require negotiation.
For example, such contracts may seek assurances as to the condition of business premises. Well-advised sellers resist this – the buyer should obtain surveyor’s advice.
Even where assurances about the business are reasonably sought, there will likely be various exceptions to those assurances which must be disclosed to the buyer before contracts are exchanged.
Professional advice helps ensure that the disclosures required are effectively made.
Expert advice plays a vital role in minimising the risk of the buyer seeking compensation under the contract.
Are you looking for a smooth, successful business sale?
If you’re planning to sell your business, getting the right legal advice is fundamental to making it a success. Our award-winning, nationally recognised corporate team can get you the right result.
Contact Paul Matthews at our Blackburn office on 01254 272460 to discuss your deal.
www.whnsolicitors.co.uk
SELLING IN A HIGH INTEREST ENVIRONMENT by Ryan Bilsborough
Manager – corporate finance, PM+M
Selling a business can be a complex process, and when combined with the current high interest environment, you may be concerned about achieving a successful sale.
We are finding that despite the current economic climate, buyer appetite remains strong.
The low interest rates we have seen in recent years were something of an anomaly – this isn’t the first time interest rates have been at their current level, and from experience, interest rates alone normally aren’t enough to delay the decision to sell or to stop those who are acquisitive.
For acquirers who may raise funds through debt financing, increasing interest costs can affect lender’s risk tolerance, meaning a greater emphasis on due diligence and increased scrutiny of buyer’s forecasts and cashflow modelling.
Despite this, lenders of all types are still willing to support M&A transactions.
What does it mean for a vendor hoping to sell? They need to adapt and position their business whilst maintaining an open mind.
By focusing on preparation well in advance of the sale, ensuring optimal timing, promoting to a wider spread of buyers, and offering flexible deal structures, business owners should be well-placed to navigate the challenges and capitalise on the opportunities presented by an active market.
Our advice - engage with experienced professionals from the outset who will guide you through the intricate process of valuation, negotiations and due diligence, whilst identifying any issues which may impact buyer confidence and crucially, ensure value is protected throughout the process of the transaction.
In a high interest environment, their insights are invaluable for positioning your business competitively and ensuring a successful sale.
Helping you achieve more through expert funding support and advice
Selling a business
Management buy-ins and buy-outs Raising finance
Buying a business Strategic business planning
Get in touch today: 01254 679131
enquiries@pmm.co.uk
LANCASHIREBUSINES SV
IEW.CO.UK
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SELLING A BUSINESS
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