Where are you now?
You have established a successful business that has a proven track record of growth in revenues and on a measure of profitability. You want to capitalise on the position that your company is in and realise your investment. Alternatively you may have had an offer from an acquirer that is too good to ignore.
Balancing the need to identify potential opportunities whilst continuing to manage business performance is vital.
What are your challenges?
A key challenge at this stage is the process of identifying possible suitors or managing unexpected approaches. Your relationships with existing shareholders will need to be managed appropriately.
Ensuring that the business continues to perform well now that there are other drains on your time is important so that you are able to present the company’s continuing potential in the best possible light at the point of exit. Having visibility on trends in the underlying performance of the business will be crucial in telling a positive story.
Accurate, robust and timely management information is vital to ensuring that any due diligence process is completed swiftly and with a positive outcome. It is important also to have sensible accounting policies, particularly revenue recognition, which will help minimise the risk of proposed adjustments to the financial information presented as part of any deal. Tax planning for the company and individuals who are key shareholders is rarely more fundamental than at this stage.
Ultimately maximising deal value will involve both commercial considerations and more technical deal structuring ideas, particularly around tax.
Recently we assisted a client to maximise deal value on the sale of their business.
We worked with management through the annual audit process to ensure that not only were their financial statements comprehensive and fairly stated, but also that key member of their team understood what the likely scope of an imminent due diligence process would be and where they needed to focus more internal effort.
Our tax team then brought a number of ideas to the table for deal maximisation including personal tax sheltering schemes, ideas on how to maximise the value of tax losses in the sale price and advice on the structuring of share option agreements on sale.
How we can help
We draw on a range of specialists within the firm to assist at each step of the exit process including corporate finance, transaction support, tax and assurance. Corporate finance specialists can assist in positioning the business for potential sale and advice on negotiations and SPA structures whilst our transaction support team provide due diligence services. The corporate tax teams bring a wealth of ideas and knowledge on how to structure deals and on sheltering personal tax liabilities.