What to consider if you are thinking of selling your business

 

Despite the ongoing uncertainties around Brexit, now is a good time to sell your business.  Trade buyers have not been put off by the economic rollercoaster and private equity houses have plenty of cash to spend.  If you are considering selling your business, here are some points to consider:

Get your house in order and be honest if it isn’t – Strong corporate governance, robust financial and tax management and a tight legal framework give buyers peace of mind. Where there are potential issues, it is important to disclose these to the buyer early, thereby avoiding eleventh hour deal breakers.

 

Get the right advice – the process can be long and time consuming, and using experienced advisers allows you to carry on running your business knowing that the sale process is being project managed by people who understand what needs to be done and when, the technical pit falls to avoid and what is commercially acceptable during negotiations.  A competent adviser will keep everyone focussed on deadlines.   

 

Do your diligence on the purchaser – before investing considerable time and energy with the chosen purchaser, it is important to gain comfort on the purchaser’s ability to deliver. The owner also needs to know that the purchaser is the right fit for their business.  Emotive factors, such as what will happen to employees, can be just as important as the price. 

 

Ensure that information provided is accurate – any offer will be based on the assumption that information provided is accurate. Should this be found not to be the case during diligence, it could lead to the initial offer being revised downwards.

 

Consider the most efficient tax structure – most purchasers are prepared to be flexible to ensure that the vendor can take advantage of any tax benefits available. Therefore, it is essential to seek specialist tax advice and structure the deal efficiently to minimise tax and any associated risks.

For more information please contact Lyn Calder (lyn.calder@aab.uk) or your usual AAB contact.

To find out more about Lyn and the Corporate Finance team, click here.