Thorogood Reports Series Read Description

Trade Secrets of Business Disposals

Spiral bound
April 2005
More details
  • Publisher
  • Published
    1st April 2005
  • ISBN 9781854183217
  • Language English
  • Pages 247 pp.
  • Size 8.25" x 11.75"

If you're like most people, you'll only get one chance to sell your business and to capitalize on years of hard work and planning. You can either fluff it, or make sure you get the best possible advisor and become financially secure for life, and possibly very rich.

Barrie writes: "This book distils over 30 years of my deal making, both as a principal and a corporate finance adviser, to reveal the trade secrets people are unaware of because these are simply neither talked nor written about." The whole book is laced with proven tactical advice, because tactics determine whether there will be a deal or not. The reality is that tactical mistakes lose deals which should have been won; an unforgivable failure."

As a business owner or group executive, you will learn all about: how to identify the right buyer--15 questions to ask if you receive an unsolicited offer; what buyers really want - and want to avoid; how to time the deal--get this right and you can't fail; the techniques of financial grooming to maximise your company's value - the 7 key techniques; how to spot with potential deal-breakers at the start; how to disclose unattractive features positively; driving the deal to suit your time-table; How to get your retaliation in first to avoid last-minute chisellers; how to achieve the best possible price; how to steer the deal to success and a maximum return; and you will also discover how choose and use your professional advisers effectively, their role and benefits, the risks involved and fees.

CHAPTER 1 - A Failed attempt to Sell Will Damage the Business: Current year performance is likely to suffer; Customers & staff may be unsettled by a leak; Owners & key directors may suffer lasting demotivation; Abortive fees for advisors are costly; Management may make an opportunistic MBO approach; CHAPTER 2 - Realize a Reality Check is Vital; How strong are buyer appetites in your sector?; Test your opinion by beauty-parading corporate finance advisers; Be realistic about likely value & deal structure; Obtain shareholder agreement at the outset; CHAPTER 3 - What Buyers Really Want or Want to Avoid: Management continuity is often the big issue; Undue customer or supplier dependence is a concern; Major customer contracts due for renewal are a threat; Necessary relocation can be a plus or a minus; Proven & consistent sales & profit growth; Forecast sales & profit growth; Tax & VAT affairs need to be clean; CHAPTER 4 - Recognise Financial Grooming is Essential to Maximise Saleability & Value: Annual budgets and monthly management accounts are a must; Take action to create an attractive sales & profit profile; Sensible cost reduction & deferral will boost realizable value; Avoid excessive provisions against profit; Turn surplus or unwanted assets into cash; Lay claim to surplus cash at the outset; Ensure you accounting policies do not understate profit; CHAPTER 5 - Commercial Features Need Grooming: Take positive action to retain key staff; Assess land or property with hidden value; Diversification & overseas expansion may reduce shareholder value; Public Relations (PR) may be a double-edged sword; Separate out & retain a peripheral business; Challenge the need for vendor due diligence; CHAPTER 6 - Unsolicited Approaches - Potential Jackpot or Major Distraction?: Recognise a random mailshot & act accordingly; A letter from a professional adviser may be a mailshot; But a phone call is probably serious; A direct approach from a private equity house should be serious; An MBO request is a potential minefield; A direct approach from a strategic buyer might be a jackpot; CHAPTER 7 - Professional Advisers Need Choosing & Appointing Carefully: Corporate finance advisers - their role & benefits; the risks; their fees; Corporate finance advisers love inverted fees - so beware; Negotiate corporate finance disbursements; Corporate finance advisers come in different shapes & sizes; Business brokers; Investment banks; Solicitors; Tax advisers; Create an effective beauty parade; Negotiate letters of engagement; CHAPTER 8 - Value your Business From The Buyers Standpoint: Adjusted profits before tax are of the essence; Major cost rationalisation opportunities; Strategic significance or rarity value; Adjust net asset value; Use your adjusted profits to value the business; CHAPTER 9 - Benefit from Expert Streetwise Tactics: Timing really is of the essence; Sell the company & your management, not yourself; Outline the structure & type of deal you want; Telegraph any potential deal-breakers at the outset; Disclose unattractive features & events positively; Never reveal your asking price first; Don't be seduced by private equity houses; Retaliate first to guard against a last minute price chisel; Sweetheart deals sometimes are really sweet; Use win - win negotiation tactics; CHAPTER 10 - Manage the Due Diligence Process Effectively: Make sure collating the due diligence information does not delay legal completion; Due diligence information to be collated; Presentation of due diligence information; Stick close to investigating accountants; CHAPTER 11 - Steer the Deal Safely to Legal Completion; Proceed towards a heads of agreement negotiation meeting; A typical Heads of Agreement negotiation agenda; Earn-out deals need defining; Warranties & indemnities included in the Share Purchase & Sale agreement; The maximum liability of the vendor; Joint & several liability for vendors; Negotiate the minimum value to trigger a claim; Purchase consideration to be held in escrow; Use your disclose statement to undermine warranties; Prepare to announce the deal internally & externally; CHAPTER 12 - Think & Plan Your Life After Exit; Who are you happy to know that you have suddenly become rich?; When will you leave your present company?; How do you intend to avoid boredom & loneliness?; How will your spouse react & cope?; Where do you want to live?; What will you do with your wealth?; What inheritance tax planning should you do?

Barrie Pearson

Barrie Pearson is Executive Chairman of Livingstone Group Guarantee plc, based in London. He provides practical help and advice to clients ranging from multinational groups to private companies, in the areas of corporate strategy, acquisitions, disposals, buy-outs and corporate finance.