steve mountain you can’t sell your business twice
TRANSCRIPT
New Horizons
“You can’t sell your business twice “
Steven Mountain
New Horizons
Key topics
• Why I wanted to sell my business• What do buyers want• What you need to do before you sell• How to go about selling your business• How the process works• The major difficulties and how to
overcome them
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Why I was selling my business
• To grow strategically the business needed £30M of capital to buy new products and better access to those new products.
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And some other reasons
• All my money was in the business and at risk• The deals were becoming bigger and riskier• I wanted to do the deals but not risk all my
money• I didn’t like the job the way I used to• I had to pay for a divorce• CGT rates were low • Legislation was getting tougher• The credit crisis was coming and I saw it
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What do buyers want?
• Strategic Fit• Strength of management• Profitable• Sustainable• Dominant or major player in segment• Competitive advantage• Free cash flow• Scaleable / Growth potential• Synergy
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What to do before you put your company on the market
• Get the right people on board and in right seat• Review your business Vs needs of buyers• Take a look at the skeletons in the cupboard• Focus on profit and free cash flow• List likely buyers and raise profile with them• Meet with corporate finance advisers (and legal)
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When you decide to sell
• Prepare a five year strategic plan• Have a good numbers guy on board• Know what you want from the deal• Have a price in mind• Don’t let the tail wag the dog• Don’t put all your eggs in one basket• Choose the right advisers• Decide who you are going to tell
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What did I want?
• The highest price possible• Cash not shares• Upfront as opposed to contingent payouts• To leave the company immediately• A quick transaction• The company to grow and prosper and for
the employees to be secure
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Dawn over the dome
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Just sign it will you
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What impeccable timing
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Major issues
• Massively time consuming• Loss of focus• Integrity• Share option holders• Warranties and Disclosure Letter• Change of control provisions
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Summary
• Plan sale well ahead• Do health check • Meet corporate finance and legal advisers• Raise your profile with potential buyers• Be clear about why you are selling, what buyers
want and what you want• Understand the process• Commit and go for it!