“BUYERS AND SELLERS”
What they really really want......
My own background...
• Recruiter
• Manager
• Director
• Chief Executive and also
• Since 1996 ‘Chief Scout’ M&A Pertemps/Network Group Holdings PLC
• Involvement in over 40 completed acquisitions High St. staffing - International search businesses
• Reviewed over 400 businesses for sale
Company Background...
Pertemps Ltd and Network Group Plc have merged ‘Network’ has delisted from AIM
Our stated intention is to grow from just under £500 million to £1 billion turnover in the next 5 years
50% of our growth will be targeted acquisitions
Mainly specialist staffing some selected high street particularly in South East
What does a ‘Seller’ look for…
Sellers want...
• Obviously a good price £££ !!?
• A ‘good home’ for the business they have built up
• A future for their staff
• To feel they have been treated fairly
They may also want..
• Continued involvement for a handover period
• An immediate exit
• A ‘White Knight’ to ride to their rescue in the event of financial distress
• Investment in their business and a partial sale
What they are not so keen on..
• Complicated deals
• Long ‘earn outs’
• A.I.M listed all share transactions ‘paper’
• Deferred consideration
• Excessive costs on professional advisors
• Feeling ‘sellers remorse’
What they should have (in an ideal world)
• Good advisors a knowledgeable lawyer and competent accountancy firm
• A firm idea of what they want from the deal. Often the buyer can be ‘guided’ by the seller
• The ability to see the ‘wood from the trees’ the deal with the most ££’s may not be the right one for them or their company
• Pragmatism...
• Being realistic on the pricing of their businesses in the market conditions they are hoping to sell in
Things to look out for?
• Try not to let the process of selling distract you from running your business
• Don’t get carried away with racy valuations .. A business after all is only worth what a buyer will pay
• The ‘devil’ is always in the detail, don't overlook the importance of getting good advice on the contact (Sale & Purchase Agreement)
“The Buyer…”
What a buyer mostly looks for:
• Not to look back and felt they have paid too much
• Strategic fit.. Either an entry into a new market, geographic location or as a useful bolt on to an existing operation
• Occasionally to buy a business or perhaps invest in a business to acquire or back an exceptional management team
• A bargain due to a quick sale required for personal circumstances or financial distress
They also probably want (in an ideal world)
• A profitable business or one that can become so reasonably quickly
• Has good secondary management or an influential junior director that wants to stay with the business
• A deal that is reasonably simple as they hate paying too many ££’s in legal and professional fees as much as sellers
• A business that is relatively easy to integrate
How does all this happen?
• Good advisors
• Sensible pricing
• Patience
• Communication & Transparency
So in summary..
The Buyer...
• Will want a business they can integrate. Without too many problems
• That has talented second tier management
• That is attractive not just on price
The Seller...
• Should be as flexible as possible in terms of deal structure
• Be aware that a headline valuation maybe not the most attractive
• Not to let the sales process distract them from running the business and it loosing value
• Make sure they have good Advisors
Any questions?