Structuring your sale
There are a number of different ways in which a sale can be structured in order to fit in with your objectives. KBS Corporate will always act in the interests of our client in order to achieve the most favourable outcome.
Some of the most common deal structures that we experience are outlined below:
Cash on Completion
Cash on completion is the preferred option of many clients, especially those looking to achieve a clean exit for reasons such as retirement or ill health.
A period of handover may be required, however the financial element of the transaction would be settled at completion.
This is where a proportion of the price is paid post completion on pre agreed dates, perhaps on a monthly, quarterly or annual basis.
These structures can sometimes allow our clients to realise an overall greater value through accepting payments over a period of time.
An Earn Out is when an initial consideration is paid upon completion and then additional performance related payments are made subject to certain caveats.
Further payments are often linked to future growth and may require the seller to remain in the business for a period in order to assist in meeting the agreed criteria.
Investment / Elevator Deal
This type of deal allows ambitious owners of growing businesses to de-risk and take a proportion of cash ‘off the table’ by selling a percentage of the company
They would typically remain involved alongside the incoming investor in order to grow a larger entity, often exiting at a future stage with a ‘smaller piece of a much larger pie’.