PRINTITRESELLER.UK 35 BUSINESS BRIEFING Why Use a Corporate Finance Advisor Last year when interest rates started rising, we saw a drop in the overall volume of completed deals fall quite sharply as the increased cost of funding impacted the market. This year Buyer confidence has returned resulting in a proportional increase in deal volume Across the technology sector we are seeing buyers actively seeking acquisitions that suit their needs and will typically be looking to increase scale and add new expertise to their team to help broaden and shore up their customer proposition. At these times, It is not uncommon for business owners to be approached directly by potential trade buyers, or people acting for trade buyers, about selling their business ‘off-market’. For a business owner, there are a small number of advantages to doing this, but we firmly believe they are far outweighed by engaging with an experienced corporate finance advisor. Here is why: 1 The buyers that approach you undertake multiple transactions a year and are vastly experienced in buying businesses. We would recommend to have someone on your side that can match that experience and know-how when you consider a transaction. 2 For most business owners, their company is their most valuable asset that has been built up over several years. Different buyers offer different offer structures and there a range of alternative options exist. Shareholders should certainly explore how different options match up with their own aspirations as transactions can come in many forms and structures? 3 The best way to drive value in a transaction is to generate competition in a process; the first offer is rarely the best offer. 4 Valuations are driven in a number of ways and knowing all of those elements is crucial in maximising that value. Commonly unadvised businesses lose value on the balance sheet, as they do not understand the nuances around excess cash and working capital 5 Selling a business is a lengthy, time consuming and often stressful process. We find that some businesses are not fully prepared to undergo a transaction, and a good advisor will ensure that the process only starts when the company is ready. 6 Whilst you will need a lawyer for all of the legal documentation, some significant elements of the legal documentation contain commercial and financial elements that lawyers will be less comfortable advising on 7 Identifying buyers, generating offers and maximising value is still only a small part of what an advisor does across the whole transaction, and our clients often underestimate the complexity of the execution phase of the transaction and the real value add from engaging a corporate finance advisor Some buyers prefer off-market deals as they are looking to pay less than the market rate. Conversely many of the more experience will often insist a seller is advised as they know that this means the company will be well prepared for the transaction, allowing a faster process and relationships are protected when discussions become heated! We would always advocate engaging with a corporate finance advisor before you start a formal process as they will deliver a far better outcome. Please feel free to get in touch for more information. www.knightcf.com Adam Zoldan Photo: pixabay.com/TheDigitalArtist
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