Castle Square Corporate Finance are experts in selling businesses, and understand the key issues shareholders face when approaching what is likely to be the most significant decision they could possibly make.
The following article sets out some of the key issues that entrepreneurs should take into account when considering selling their business. Few people are serial entrepreneurs and therefore the decision to sell is likely to be a once in a life time opportunity and the value realised is likely to represent a life changing value for the shareholders.
Working with a variety of entrepreneurs on disposals we, at Castle Square, would first look to understand why you wish to sell? What is your key criteria? Is it; to generate a cash lump sum to provide for your retirement, to position your company as part of a larger group and retain a position in a larger entity or whether a disposal is the right
thing for you. With this fundamental understanding, we can deliver a bespoke service that is focused on achieving your objectives.
Whilst selling is an intrinsic skill for most entrepreneurs, the ability to convince others that your business is the one for them is fundamentally distinctive. It is a different selling skill and in our belief is the reason why you should partner with a firm that has a track record and reputation for delivering transactions.
The disposal process is not like selling a product or service, it takes skill to understand why someone would be interested in your business. Alongside understanding your motivation, we would also look to identify who would buy your business? What makes it interesting to them? What opportunities are there for further development?
At Castle Square we avoid producing “vanilla”sales documents, we believe that an Information Memorandum is as individual as a fingerprint. In many cases obtaining interest from potential acquirers can reflect the “two-minute elevator pitch”. In approaching a business with an acquisition, you are likely to be dealing with entrepreneurs who are extremely busy and therefore the information you present must address the Unique Selling Points of your business however, these must be presented in such a way that attracts immediate interest.
We see documents prepared on behalf of companies for sale where the firm presenting the information, are oblivious of the background and experience of the target audience and therefore, are setting themselves up to fail or to miss that acquirer who will pay the special price. Our focus is on “research, research, research” to understand your target audience, identifying those companies that will pay the premium price.
It may seem illogical but it is also fundamental to understand what may detract from value. If you understand these issues you can take control of the “news-cycle”. Acquirers do not like surprises, we have worked with many clients that have walked away from good businesses due to surprises coming out midway through the transaction. Our approach is to manage this disclosure, present the information on our terms and actively managing the impact
on the transaction and protect your value.
To summarise, at Castle Square we approach each transaction as a unique opportunity, there is no one size fits all. We bring our extensive experience to each transaction to understand; your motivation for undertaking the transaction, what makes your company attractive. Who would be interested and why? What benefit would an acquirer gain from the acquisition? Why would they pay a special price and what are the hurdles and traps that
could delay or scupper a deal.
In taking this approach and working closely with our clients, as the trusted advisor, we generate significant additional value for every transaction. Whether you are contemplating a retirement or a sale of a non-core subsidiary, Castle Square will be at hand to offer our unique service to secure your business sale is a success with a properly planned exit.