2018: The art of good timing

The art of timing the exit from your business

The beginning of 2018 sees M&A activity remain buoyant despite the uncertainties of Brexit and the unease caused by Carillion’s collapse. Buyers and sellers remain active and the drivers of continued activity are a strategic intent, quality targets, and availability of cash, exchange rates, and our relatively benign tax regime.

Motivated buyers

We see trader buyers driven by a clear minded strategy. This combined with the quality of businesses in our area means that real competition amongst trade buyers is yielding attractive exit values for entrepreneurs. At the same time trade and Private Equity buyers have cash to spend and good access to finance. The low value of the pound makes our businesses look good value around the world.

Motivated Sellers

Business owners are driven by their own succession needs and the dynamics of their own markets – and by concern that this might be as good as it gets!  Brexit is a concern and we hear business owners expressing concern that the benign tax regime (with low rates of corporation tax and particularly low rates of Capital Gains Tax for those selling businesses) might not survive a change of government were Mr Corbyn to arrive at No 10.

Active Sectors

We’re seeing activity across all a number of sectors, particularly in leisure, IT, distribution, recruitment, property, and life sciences

The art of good timing

Everyone wants to sell their business at maximum value. This will be when its products and services are well up the S-curve but with growth to come that a buyer will value. Why wait for a buyer to knock on the door at a time of their choosing?  Much better to pick the best time and take the offensive to the buyers. Define your strategy and prepare your company to make a good first impression when you approach buyers.   Sell when the market is strong, make sure you don’t need to sell early and make sure you do sell at a time of your choosing.  

Running a business is a full-time occupation, and reaching strategic clarity is difficult.  For this reason we run a regular Business Exit Strategies seminar aimed at giving business owners the tools and insight needed to build their exit strategy at the best time for their business and its market. Tickets for upcoming events in Cambridge, Brentwood, Borehamwood, Peterborough and Kettering can be booked via our website.

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Lake Falconer

Corporate Finance Partner
Lake leads the PEM Corporate Finance team on MBO, acquisition, disposal, succession and strategic planning. He also heads up PEM’s valuation team providing business valuations for shareholder exits, disputes, business planning and regulation. Lake has over 30 years' senior level experience as a business adviser and as a manager in industry. He holds the ICAEW corporate finance qualification.

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