Page 19 - Exit feature 2017 Final new amended new

TIMELINE FOR TYPICAL SALE PROCESS

Exit review Sale process
Tip: Ask to see
12 -36 Months Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
internal documents
relating to the
approach; if there
are none this is a
good indicator that
they’re not serious

Exit Review Preparation Marketing Completion

You can go a long way yourself as they start thinking about the impact
finding potential buyers by forming on them. It could impact performance
and de-motivate everyone if the deal
partnerships in advance of a sale; so falls through. In the early stages, only tell
you can get engaged before getting senior management making it clear that
married. it’s a preliminary exercise that may or may
Mike Lander, CEO, Ensoul not result in a sale.

If the sale is likely to go through, prepare
an agreed announcement as part of a
PARTNER INSIGHT:
PARTNER INSIGHT: plan to inform all staff just before it’s
WARRANTY CLAIMS publicly announced. Experts advise taking
WARRANTY CLAIMS
Ian Morris, Principal, EMW Law LLP account of employment laws and TUPE
Ian Morris, Principal, EMW Law LLP
regulations, particularly if the sale will
result in redundancies or role changes.
Post completion
Post completion
Post completion
warranty claims are
warranty claims are
warranty claims are NEGOTIATING THE DEAL
rare but
rare but
rare but not unheard not unheard not unheard
of. The most One member observed that “a good
of. The most
of. The most
common reason for
common reason for negotiation will extract the maximum
common reason for
a warranty claim
a warranty claim
a warranty claim bearable pain from each party, so accept
is an issue with the
is an issue with the
is an issue with the some; there are more entrepreneurs who
warranted accounts
warranted accounts
warranted accounts regret not selling than the price they got”.
so that either assets
so that either assets
so that either assets
or profit (or both)
or profit (or both)
or profit (or both)
are overstated. Understanding what is important to
are overstated.
are overstated.
the buyer is the first step in negotiating
When selling on a multiple of profits it can
When selling on a multiple of profits it can the best deal. It might be for strategic,
When selling on a multiple of profits it can
be seen that every £1 of overstated profits
be seen that every £1 of overstated profits commercial, or even emotional reasons
be seen that every £1 of overstated profits
can be very expensive. My advice would be
can be very expensive. My advice would be
can be very expensive. My advice would be which could add a premium to the value.
to have in the business a finance director Earn-outs can encourage a buyer to pay a
to have in the business a finance director
to have in the business a finance director
of sufficient quality so that the numbers
of sufficient quality so that the numbers
of sufficient quality so that the numbers higher price, as you are both investing in
and accounting policies just aren’t an
and accounting policies just aren’t an
and accounting policies just aren’t an future performance. However, earn-outs
issue.
issue.
issue.
don’t always work, so some members
recommend that you try to get as much