Exits from Businesses | Achieving best value

Crucial assistance in achieving best value

An owner's exit from a business is a major event. Having developed the business, great care is required in maximising its value on sale or other exit. Specialist corporate finance advice is crucial in order to achieve the best possible result.

It may be that all the owners of the business wish to sell immediately, in which case Corbett Keeling would normally find a suitable trade or financial buyer for the entire business and execute a sale of 100% of it. In other circumstances, the owners of a business may have divergent interests: some may be keen to sell while others want to remain in ownership, in which case Corbett Keeling may recommend an initial public offering ("IPO") of the company's shares on a public market. Alternatively it may arrange for one shareholder to buy out another – or for a third party to replace the selling shareholder.

In some circumstances, it may suit the owners of a business to sell over a period of time. For example, a financial owner may seek to improve its annualised rate of return by arranging for the investee business to borrow funds to buy back part of its stake. Likewise, an owner manager may regard having too high a proportion of wealth tied up in one company as too risky and may arrange to make a partial exit by bringing in an equity partner to buy a stake in the business. In either case, as well as taking cash out, the owner leaves some equity in the business to share in the future upside.

In preparing for exit, Corbett Keeling will help its client assess which of the various routes is likely to provide the most favourable result, if appropriate recommending that a variety of options are kept open.  For example it is quite common to run a "twin track process" between (i) a potential sale to a trade or financial buyer and (ii) an initial public offering ("IPO").

 

In order to maximise price, access to the widest possible range of buyers is vital. This requires:

• Strong sector knowledge – Corbett Keeling divides itself into specialist teams, each with in-depth knowledge of particular sectors. It therefore has the specialist knowledge required to access buyers in almost all industry sectors.

 

• International reach – Corbett Keeling is a member of Globalscope (www.globalscopepartners.com), an international mergers and acquisitions network with offices from China through India, Africa and all major European countries to the Americas. It can therefore access buyers from across the globe.

 

 

• Access to financial buyers – as a result of the firm’s specialisation of advising on management buy-outs, Corbett Keeling has particularly strong access to financial buyers. The firm can therefore find the financial buyer that is most suited to the size, sector, location and stage of development of a business being sold.

 

 

• Access to databases – Corbett Keeling subscribes to and maintains its own proprietary databases of likely purchasers of businesses.

 

In helping its clients with the sale of 100% of a business to a trade or financial buyer, Corbett Keeling:

• researches the sectors most likely to contain a potential buyer;
• designs the sale process to achieve the objectives of the seller(s) and reflect their unique aims – in this respect, the requirements of a  financial or trade owner, for example, may be different from those of a private individual or family owner;
• prepares a sale memorandum about the business;
• prepares and discusses with its client long and short lists of potential buyers, including, where appropriate, those from overseas – agreeing with the client which buyers to approach and when;
• evaluates the level of interest and quality of each potential buyer through personal contact and using an anonymous profile of the business;
• controls the confidential distribution of the sale memorandum to potential buyers;
• as appropriate, arranges vendor due diligence and "staple finance" (debt funding to be used by the purchaser);
• manages the sale process and timetable to its client’s best advantage, monitoring information flow, arranging and attending meetings, and receiving bids;
• advises on the structure and negotiation of the transaction;
• assists with the formulation of heads of agreement;
• monitors the due diligence process; and
• advises, in conjunction with lawyers, on the completion of the deal.

In helping its clients through an IPO, Corbett Keeling provides independent advice from the start of the process to the end, including on:

• appointment of the full advisory team – brokers, lawyers, accountants etc;
• setting the detailed timetable for the transaction;
• preparing the business for IPO – for example strengthening the board and ensuring the company is able to comply with relevant regulations;
• arranging an accountant's due diligence report and drafting of a prospectus;
• evaluating feedback from the chosen broker on likely institutional demand and the resultant pricing of the issue; and
• completion and admission to the selected stock market.

In summary:  Corbett Keeling has extremely strong access to purchasers for your business and the depth of corporate finance expertise to advise on the best route to exit. It is therefore well positioned to advise on how best to complete your exit and identify the most likely potential buyers in order to maximise the proceeds obtained. The firm’s team has a track record of successfully advising on exits from businesses.