SELLING YOUR DISTRIBUTION AND LOGISTICS COMPANY
Has the time come to sell your distribution and logistics company? It is never too early to think about your exit strategy – whether you are looking to retire, seeking investment or want to pursue something new, a company sale could be your solution.
The success of a company sale can be influenced greatly by market trends and profitability potential. Fortunately for distribution and logistics business owners, there is a continued demand for reliable companies offering these services.
Organisations across all industries continue to innovate their offerings, relying upon an infrastructure that can only function with the right distribution and logistics partner.
KBS Corporate has the experience and industry knowledge to get you the right deal for your distribution and logistics company.
SELLING YOUR DISTRIBUTION AND LOGISTICS COMPANY
THE CHANGING DISTRIBUTION AND LOGISTICS MARKET
Over the past few years, the distribution and logistics market has evolved greatly due to technological advancements, as well as the risk of global companies establishing their own in-house infrastructures.
The most successful third-party providers of distribution and logistics services have grown through investment and ongoing evolution to thrive in a changing market. The acceleration of online retailing has offered vast opportunities for companies to invest in road, air and rail transportation capabilities.
Distribution and logistics companies have mitigated the impact of numerous external factors, such as the following:
- Fuel price fluctuations, leading to consolidated shipments, investment in efficient transportation and dedicated management systems to optimise productivity
- Ever-changing health and safety regulations to minimise risks and secure industry-recognised accreditations
- Expedited delivery times becoming the norm across all retail industries, resulting in stricter client terms, constant pressure and potential penalties
The factors above have led shareholders and company owners to continue investing in their fleets, workforce and management software to thrive in the changing logistics landscape.
HOW TO VALUE MY DISTRIBUTION AND LOGISTICS COMPANY
Recognising the value of your distribution and logistics company can help manage your expectations when pursuing a sale. It can be beneficial to work with a company valuation expert to understand how profitable a potential transaction will be.
Factors which influence the value of a distribution and logistics company include:
• Volume, length and value of contracts
• Profit over the previous three to five years
• Customer acquisition capabilities
• Location and fleet size
• Workforce and management team
• Current market conditions and trends
To communicate the value of your distribution and logistics company, KBS Corporate typically presents a company’s earnings before interest, tax, depreciation and amortisation (EBITDA). EBITDA effectively communicates a company’s true operating value before taking into account external factors.
When pursuing a sale, you will typically be looking for a multiple of your EBITDA. Whilst the industry average for distribution and logistics companies ranges between 4x and 6x, KBS Corporate prides itself on maintaining a network of buyers actively competing for the most attractive opportunities.
WHAT AFFECTS THE VALUE OF MY DISTRIBUTION AND LOGISTICS COMPANY?
When exploring the acquisition of a distribution and logistics company, one of a buyer’s primary interests will be in your vendor relationships and recurring revenue streams. Maintaining long-standing contracts can be what sets your company apart and increases its value.
A low customer churn rate will present you as a trusted and reliable business partner, often resulting in a larger pool of interested parties. Demonstrating a low customer churn rate alongside significant order volume, frequency and average order size is key to attracting the right buyers.
STAGES OF SELLING A DISTRIBUTION AND LOGISTICS COMPANY
1. Time your sale
Timing your sale can help maximise value and give you plenty of time to prepare for coming changes. A company sale requires patience and determination, so it is never too early to start thinking about your exit plans.
2. Get your finances in order
Your finances will be scrutinised during the sale of your distribution and logistics company. Take the time to prepare your accounts, finalise reports and collate everything that can demonstrate the profitability of your company.
3. Consult a company sales specialist
Having a skilled adviser on your side can ensure you get the value you deserve while allowing you to keep running the company to the best of your ability. KBS Corporate boasts 25 years of experience in distribution company sales, benefitting from a tried-and-tested approach to the market to find the right buyer.
4. Prepare a sales memorandum
A dedicated sales brochure, or information memorandum, is an effective tool that can be used to communicate your key selling points to potential buyers and investors.
5. Negotiate with interested parties
After sharing the opportunity with the M&A market, you may have several interested parties enquiring about your distribution and logistics company. Now is the time to affirm your expectations and make sure you can align with a potential buyer’s long-term vision.
6. Accept an offer
Once you have found an ideal buyer who has submitted their offer, the time has come to accept. You could present a counter proposal if required, so there is no reason to rush to the final hurdle.
7. Complete due diligence and the legal process
Once you’ve accepted an offer and agreed to the terms of the sale, the buyer will have the opportunity to confirm their assumptions about your distribution and logistics company through due diligence. Once satisfied, solicitors will oversee the preparation of final contracts and ownership handover.
8. Celebrate!
You’ve done it! Solicitors will confirm when ownership has officially transferred and you will be ready to inform Companies House of the sale. Subject to the terms of your sale, you may be preparing to settle into your new partnership or looking for the ideal destination to enjoy a well-deserved break.
WHO WILL BUY MY DISTRIBUTION COMPANY?
By working alongside KBS Corporate, you will have the opportunity to explore possibilities with various buyer types you have not previously considered.
Your distribution and logistics company could be acquired by:
• Individuals looking for an opportunity which they can oversee as an owner-manager, boasting previous experience in the logistics industry
• Trade buyers seeking expansion and diversification opportunities by acquiring synergy companies in complementary markets
• Investors and private equity firms looking to support profitable companies with strong management teams and provide the necessary resources to accelerate future growth
I was happy, it was an easy process and KBS handled it well,
I would recommend KBS Corporate to anyone who wants to explore a business sale and is seeking sound advice.
Tim Hogarth
Founder of Hogarth Antiques Ltd
“I was happy, it was an easy process and KBS handled it well. I would recommend KBS Corporate to anyone who wants to explore a business sale and is seeking sound advice.”
KBS Corporate has been a fantastic partner for us.
Within six months of the initial teaser, the deal completed and we are all thrilled with the outcome.
Ed Johnson
CEO of PushFar
“KBS Corporate has been a fantastic partner for us. From initial research through to deal completion, George Barnes (Associate Corporate Director), Aaron (McWilliams, Senior Research Analyst) and the entire team were dedicated, hard-working, thoughtful, considerate and found several parties interested in our business.
“Within six months of the initial teaser, the deal completed and we are all thrilled with the outcome.”
HOW LONG WILL IT TAKE TO SELL MY DISTRIBUTION COMPANY?
Selling your distribution and logistics company is a process that is best served with patience and determination. Whilst a sale typically takes between nine and 12 months, there is not an exact science when predicting how long it will be before you find the right buyer to satisfy your goals.
By working with KBS Corporate, you will be able to reach a larger pool of buyers, enhancing your chances of finding a suitable acquirer in a smaller window of time.
OUR EXPERIENCE OF SELLING DISTRIBUTION AND LOGISTICS COMPANIES
For over 25 years, we have been accumulating vast experience in completing sales of distribution and logistics companies, maximising the full potential of the intricate network of acquirers we have developed.
This network includes some of the industry’s most eminent operators, such as EFS Global whose Group includes several companies that were acquired through KBS – Logictrans, CS Brunt, Euro SDB, Eminence Transport and Floryn.
In addition, one of the world’s best-known leasing and rental companies Avis Budget Group, with operations in 180 countries, bought McNicoll Vehicle Hire as a Scottish base from which further expansion could be pursued.
EXPERT SUPPORT SELLING YOUR DISTRIBUTION & LOGISTICS COMPANY
KBS Corporate is the UK’s leading business sales adviser, benefitting from an extensive team of professionals across multiple specialisms. We have the knowledge, buyer reach and industry insights you need to secure the value you deserve for your distribution and logistics business.
Get in touch with KBS Corporate today for a no-obligation discussion and put your business sale in motion.
SALES WE HAVE COMPLETED
IN THE DISTRIBUTION & LOGISTICS SECTOR
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