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
 
Keith Day
7th February 2019 Businesses urged to prepare for post-Brexit Customs

HMRC is urging VAT-registered UK businesses which trade exclusively with the EU to be prepared for a no deal Brexit.   In a letter sent to 145,000 affected businesses, HMRC explains changes to Customs, Excise and VAT procedures in the ‘unlikely event’ that the UK leaves the EU without a Brexit deal.   HMRC’s letter…

Read More »

Adrian Mackenzie
7th February 2019 Beware of pension investment scams

The Insolvency Service has urged individuals saving for retirement to protect their pension pots from criminals and ‘negligent trustees’.   Research carried out by the Service found that criminals use a range of tactics to convince savers to part with their funds, including persuading individuals to access their pension and invest in unregulated schemes.  …

Read More »

Victor Courdelle
7th February 2019 MTD for VAT – pilot extended to all eligible businesses

  HMRC has extended its Making Tax Digital for VAT (MTDfV) pilot scheme to all eligible businesses. For most businesses, compliance with the regulations is mandated for VAT return periods beginning on or after 1 April 2019. However, MTDfV for some ‘more complex’ businesses has been deferred until 1 October 2019. This deferral applies to:…

Read More »

Stephen Malkin
1st February 2019 MTD for VAT: Which Bridging Software?

As we approach the 1 April 2019 deadline for the introduction of MTD compliant VAT submissions, many businesses will at last be focusing on what solution they should adopt.   If their current bookkeeping system does not already have an upgrade that automatically provides this new functionality, they will be considering adopting ‘bridging software’.   Looking through…

Read More »

Ian Piper
18th January 2019 CryptoCurrency Taxation: HMRC close loophole?

HMRC are not known for being ahead of the curve, so trying to find official guidance on how exchange gains from selling bitcoin, and other crypto currencies, is expected to be self-assessed and taxed, was always going to be ‘problematic’. At the time of first researching this, the latest HMRC guidance was published in 3…

Read More »

Peter Brown
13th January 2019 5 things you need to know about Making Tax Digital

  Making Tax Digital (MTD) is the hot topic this year. It’s one of the most fundamental changes to the UK tax system since the introduction of self-assessment. From April 2019, VAT registered businesses with a turnover of over £85,000 will be required to keep records using software approved by HMRC.  We have condensed the…

Read More »