| Matters
to be Addressed
A
guide on what to do and the likely procedures you will need to adopt.
1.
The main reason for sale
- Retirement
- Ill
health
- Cash
flow difficulties
- An
approach
- Matrimonial
settlement
- Change
of direction
- Create
a capital gain
-
Non core activity (plc mainly)
- Outgrown
owners management ability
- Hassle
factor
- Owner
not prepared to risk further capital in developing company
- Tax
implications for shareholders and directors
2.
Type of sale transaction
- Trade
sale - Vertical - Horizontal - Competitor - Conglomerate
- MBO,
MBI or BIMBO
- Equity
market - Fully listed - Unlisted
3.
The present market
- Influence
of banks and other professions
- Effect
of EC regulations
- Contract
requirements
4.
Matters you need to consider and decisions you need to make
- The
genuine reason for sale
- Sale
of assets or shares
- Tax
implications as a result of sale
- Valuation
expectancy
- Method
of payment
- Handover
5.
What do serious purchasers ideally require
- Company
prospectus to include history, activities, staff details, shareholdings,
financial summary, product literature, market competition, reason
for sale
- Profitable
track record in terms of sales and maintainable profits
- Strong
ongoing management team
- Good
financial controls to include reliable monthly management figures
- Positive
cash flow
- Good
customer spread
- High
margins
- Modern
plant
- Brand
identity
- Understanding
of market competition
- Growth
potential
- Good
physical appearance
- Genuine
reason for sale
- An
indication of price expectancy and basis of valuation
- Genuine
commitment to sale
- Business
plan
6.
Factors to be considered in any valuation
- Maintainable
profits
- Adjustments
for ownership
- Revaluation
of assets
- Market
multiples
- Goodwill
- Security
on balance payments
- Up
front sale vis-a-vis package transaction
- Ongoing
involvement
- Ratio
of goodwill to underlying assets
7.
Negotiations
8.
Contracts
- Due
diligence procedures
- Legals
- Warranties
9.
Methods of payments
- Cash
- Shares
- ordinary, preference, loan stock
- Earn
out
10.
Tax considerations
- CGT
- Taper
relief
- Ex
Patria Status
- Roll
over relief
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