Business Sales FAQs
Business Sales FAQs
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What are business sales?
A business sale encompasses the process whereby a company is consolidated via a financial transaction with another company. There are various ways in which this can be done, but ultimately it will result in the companies being brought under the same umbrella.
What are the benefits of business sales?
There are several ways in which business sales can generate growth. For example, there is bound to be a wider market reach due to the greater resources and talent base, a sharing of the managerial load and a bigger pool of contacts. This should help to not only develop a greater market share, but to increase the existing service or product offering and grow revenues aligned with a reduction in costs through shared budgets and greater purchasing power.
What services are beneficial for a business sale?
In addition to advising on your company sale, we can arrange the provision of a range of services which you may require to ensure the process evolves as smoothly as possible. These include tax advice, due diligence, legal services and restructuring. Call us on 0161 258 0118 for a confidential chat about the services available.
What legal documents are involved in a business sale?
As you would imagine, there is a variety of legal documents that will underpin the process, including non-disclosure and confidentiality agreements (NDAs), tax authority certificates, exclusivity agreements and the ultimate acquisition contract. But you needn’t worry about becoming bogged down in paperwork and red tape because we can oversee all those aspects of the transaction, leaving you free to focus on ensuring your business functions to the best possible effect.
What is a buyout?
A buyout occurs when one party purchases shares in a company to acquire a controlling interest. One kind of buyout in which we have considerable experience is a management buyout (MBO) where the company’s most senior employees purchase its assets from the owner with the aim of growing the business and driving it forward.
What’s the importance of due diligence in business sales?
Due diligence is the process in which the data of the target business will be audited on behalf of the acquirer to verify the accuracy of the financial information presented. It is an extremely important part of a transaction as it ensures that a full and accurate picture of the company’s performance and outlook has been disclosed.
What’s the impact of a business sale on shareholders?
If a business is owned by a single shareholder, they will need to decide at the outset of the sale process upon their desired outcome. Is it a full or partial exit from the company? Do they want to retain a minor shareholding? It could also be the case that a partnership needs to be dissolved, possibly as the result of a disagreement. We have a long-established proven track record of delivering results that satisfy and exceed shareholders’ expectations.
What’s the impact of a business sale on employees?
The position of employees within a business sale must be managed carefully because if the workforce became aware a change of ownership was pending, it could lead to significant turbulence due to the staff feeling unsettled and concerned about what the future might hold. Confidentiality is therefore extremely important, and some shareholders favour a buyer who pledges to ringfence the jobs of the existing employees.
What restrictions might apply to a business sale?
These often centre upon competition laws, in respect of starting up a new company which directly competes with the business you have sold or precluding you from poaching its customers, employees or suppliers for a specified length of time. In the case of large companies with a dominant market share, acquisitions could result in a monopoly scenario that would attract the attention of the Office of Fair Trading – but for that to happen, the turnover threshold for the target business would have to be a minimum of £100 million.
How is the business sales market currently performing?
While some company sales advisers may have been experiencing a difficult time, it has certainly not been the case for KBS Corporate. That is illustrated by the fact we have been named the No 1-ranked mid-market business sales adviser in the UK for both 2022 and 2023. And with the UK interest rate expected to fall significantly, having risen to 5.25%, that will mean acquisitive SMEs have more room for manoeuvre in the marketplace because capital will be easier and more affordable to obtain.