Planning

22nd June 2016

Business Exit Planning: A case study.

Three years ago, I was approached by business owners who wanted advice on exit planning. The owners had built up a successful business over 20 years and were now in their late fifties. The business is a leader in its field and operates with a high level of professionalism. The owners felt strongly that their ethos should continue after a sale. It was therefore important who they sold the company to. With the agreement of the owners we initially carried out a low key marketing exercise. This consisted of identifying a small number of potentially interested parties and contacting them in confidence. This generated a number of meetings with potential purchasers, but none were considered an appropriate fit.

The next stage was to consider whether a Management Buy-Out could be a realistic option. The owners hadn’t originally thought that the existing management could form a Management Buy-Out team, but on reconsideration decided to raise the prospect with them. In order to assist the management team in deciding whether this option was something they wanted to pursue further, we arranged for them to undertake a training session for potential Management Buy-Out candidates. This was led by Kirsty McGregor (Chairman of The Corporate Finance Network). The team subsequently decided that they couldn’t make the financial commitment involved. Shortly afterwards the owners were approached by an ex-PLC senior executive offering his consultancy services.  He was initially engaged on a short project in order to assess whether he might turn out to be a suitable acquirer of the company. This arrangement worked well and a year later, after much negotiation, the company was sold to a team headed by him.

This case had a very positive outcome but illustrates the importance of starting Exit Planning in good time. Using an advisor with specialist corporate finance knowledge is essential in guiding owners through a successful exit of their business.



 
Other items in Blogs
 
Ian Piper
15th April 2021 2021 SME Growth: Revenge Spending?

As we pass the Covid-19’s first anniversary of its impact on our area’s economy, accounts of local SME’s are now starting to show part of the damage they have experienced through the lock-downs and associated restrictive measures. Thankfully, through Government financial help and the nimble footwork of businesses adapting to survive, the overall effect upon…

Read More »

Jaimie King
15th April 2021 Life after CBILS: The Recovery Loan Scheme

The government-backed Coronavirus Business Interruption Loan Scheme closed on 31st March to new applicants. Thankfully, the government has put in place further support for businesses, to follow this.   The Recovery Loan Scheme – Government backed loans, 3 months – up to 6 years depending on the product – Up to £10m, no cap on…

Read More »

Vanessa Pearson
26th March 2021 6 April: A Guide to Off-Payroll Working Tax Rules

The proposed new rules apply regarding who determines IR35 status for freelancers hired by medium and large companies are imminent. Our Brief Guide will help find out how this affects you and what you can do: A Brief Guide to Off-Payroll Working Blog entry by: Vanessa Pearson

Read More »

Ben Kilby
25th March 2021 I hear a rumour…

I hear a rumour that Lloyds Agricultural banking team based in Edinburgh has been disbanded and merged within other teams around the country. Although some within the new regional teams may have some knowledge of agriculture it has been suggested that customers felt that this was not important. It seems that the agricultural specialism within…

Read More »

Fiona Mann
24th March 2021 Making Tax Digital – the next steps

Our MTD Group have produced Issue 5 of their newsletter giving details of Making Tax Digital (MTD) as it continues.   So if you are unsure of what to do next, our newsletter has information and advice how to proceed.  Don’t delay however as penalties will be introduced if submission deadlines are missed.   W&P_MTD5…

Read More »

Amanda Newman
18th March 2021 Holding residential lettings in a company

There has been an ongoing debate since the government started to reduce tax relief available on mortgage interest that having property in a company could be more beneficial.   In order to transfer the property from personal ownership there could be a CGT charge depending on the difference in value from when you bought it…

Read More »