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
 
Jodie Tarbin
23rd July 2019 Residential Property Tax News!

  Lettings Relief and Principal Private Residence Relief   Following my previous blog regarding the changes announced to the Principal Private Residence Relief (PPR) and lettings relief rules, the consultation period ended on 1 June 2019. You can view the consultation responses here.   HMRC have now published a policy paper on 11 July 2019,…

Read More »

Fiona Mann
22nd July 2019 Exam Success – World Beating Results!

  We’ve had some extraordinary exam results over the last few days – staff at Whiting & Partners have excelled themselves. Luke Bacon from St Ives office has achieved an outstanding result of 99% for the Financial Accounting and Reporting exam – coming joint first in the world.  This result has been recognised by the…

Read More »

Matilda Mawson
19th July 2019 Changes to Entrepreneurs Relief from 6 April 2019

Entrepreneurs’ relief allows a reduced rate of capital gains tax on disposals of all or part of your business assets. The reduced tax rate is 10% on up to £10 million of lifetime gains. There have been a number of significant changes to entrepreneurs’ relief in the last year, tightening the rules on qualifying conditions…

Read More »

Ernesta Petkeviciute
19th July 2019 New SRA accounting rules – what’s changing?

The current Accounts Rules are made up of over 40 detailed requirements, making it difficult for firms to fully understand what is required of them, as well as giving firms no flexibility to adapt them to their own practices and decide how best to look after client’s money.   The new rules coming into effect…

Read More »

Vanessa Pearson
15th July 2019 IR35: private sector off-payroll rules for contractors

This week HMRC have published draft legislation that will affect private sector personal services companies (PSCs)  from 6 April 2020. PSC’s supplying services to medium or large-sized organisations will no longer decide if they are employed or self-employed, the end engager will assess this. If caught by these rules, known as IR35, employment taxes and…

Read More »

Paul Jefferson
15th July 2019 Company car tax changes – Government will remove BIK company car tax on Electric Vehicles from 2020/21

The government has provided positive news for Company car drivers announcing that a pure electric vehicle (EV) will no longer pay benefit-in-kind (BIK) tax in 2020/21 following a review which looks set to boost sales of emissions-free cars. HM Treasury’s response to its review of the fallout from the roll-out of the Worldwide Harmonised Light…

Read More »