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Buy or Sell a Business

If you’re asking how would I ….:

  • Sell my business for the best price?
  • Sell my business whilst running it – and keep my sanity?
  • Buy out my competitor/partner and at what cost?

Then Alpha-Financials’ in-depth experience of M&A transactions ensures you buy or sell at the best possible price, within an agreed completion timescale

We can assist you at any point in the buy or sale process from strategy, valuation, due diligence, negotiations, finance raising to contractual closure

Buying a business

Are you looking to quickly expand through acquisition and:

* need assistance to identify potential targets > we undertake discreet studies with you

* already have a specific target company in mind or maybe someone approached you who wants an exit of their own business, and is the

> Value unclear thus finance uncertain too 
> Value clear, finance unsecured
> Value clear, finance secured 

Whichever applies, you’ve come to the right place to seek help and guidance.

Selling a Business

The four key stages of successfully selling your business consist of :

* getting the right strategy 

Common sense strategy means establishing clear objectives, timescales and a workable plan.

* undertaking sufficient preparation

Creating a plausible Business Plan or Information Memorandum and perhaps launching a profit improvement plan (see Financial Sounding board and Reduce costs options) in addition to an independent business valuation and suitable market research of potential buyers

* effective interaction with the market

This is all about maintaining adequate and effective competition, and securing proper bids whilst protecting the business as an independent going concern.

* completing the transaction.

Getting all the final commercial terms right in the final contracts in order to maximise the proceeds.

What’s it truly worth?

How do I finance it?

How do I integrate it with my business?

Buying a business, where you are now?

The kind of business plan that you require depends entirely on what you wish to use it for. Which of the following applies most closely to you?

Option 1

There are several business valuation methods, so picking the right one and using it appropriately so as to establish a ‘picture’ of value is crucial. We have done this hundreds of times and it’s a particular area of expertise.

Having established a range of plausible valuations, the next step is to secure the finance:

 

Option 2

With a clear value, we now need a financial plan which brings the two separate businesses together and adds in the costs of integrating them together with the possible synergies achievable.

In turn this will indicate the total finance required to achieve the acquisition which will typically comprise some combination of the buyers own resources (cash in the business or new equity) and new funding (some form of debt or third-party equity).

Approaching third parties for funding [link to raising funds] requires both a credible plan [link business planning] and a specialised financial model [link to our model].  Third parties will need reassurance that their returns areplausible and relatively safe so a professional and credible plan is of paramount importance.  Alpha-Financials has considerable experience and expertise in this area.

Last but not least and prior to contract signing, the final step is to plan for the integration of the two businesses:

Option 3

It’s easy to underestimate the effort required to integrate two separate businesses, so advance planning for this process will make a difference.  It may require temporarily employing extra resource to ensure that integration doesn’t come at the expense current operations.

In this regard, perhaps you’d benefit from an experienced finance sounding board.

£102m

Total value of M&A transactions processed

£79m

Largest value transaction

£300k

Smallest value transaction

Frequently Asked Questions

Even the highest bid might be below fair value, but you won’t know if you don’t have an independent business valuation. It could be that you’re selling at the wrong time or that you simply haven’t found the right buyer.

When professionally prepared, an independent business valuation can help you present your case to prospective purchasers in the best possible light, thus securing a higher price than would otherwise be the case.

This is usually a trade-off between getting a good deal whilst making a competitive offer acceptable to the seller.  Understanding the value drivers and how the key risks and opportunities affect value will be key to bidding effectively and undertaking sensible negotiations with the seller.

Numerous mechanisms can be employed to reduce risks associated with any particular valuation with the common ones including partial deferment of the price paid which is then linked to future performance, earn out clauses for exiting owner/mangers and specific contractual clauses for know issues in the sale agreement.

Case Studies

Get in touch

A specific problem, a desire to reduce accounting costs or you just want some general financial advice from qualified experts? Then call us NOW

Case Studies

Case Study 01

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Case Study 02

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Case Study 03

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Get in touch

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If you have any questions please get in touch using the contact details below, or using the form and we’ll get in touch with you as soon as possible.