Market remains strong for businesses looking at next step, by Darren Bear, Partner at Grant Thornton
Pre-Brexit many were predicting that Armageddon would follow. However, the reality has proven different and the market remains strong for owner managers across the region looking to realise the full value of their business on exit or manage future succession. Our experience at Grant Thornton is that there is still a healthy appetite from larger UK and overseas corporates looking to acquire quality, privately owned businesses.
Furthermore, access to finance remains strong through high street banks, equity and alternative funders, ensuring vendors can engineer an appropriate transaction to meet their aspirations.
The last 12 months has proved a record-breaking year for our Advisory team both locally and nationally, and this surge in transaction activity have predominately been driven by private and family owned business exits, supported by highly acquisitive corporates.
Key to the successful sale or succession of any business is the pre-deal grooming process. Many mid-market companies are led by brilliant entrepreneurs or long established families who run a very tight ship - but management depth and succession can be a challenge. These entrepreneurial and family business models do not always transfer well to acquirers who can become nervous that if the entrepreneur or key family members are lost, the business knowledge will go with them.
Funders equally want to see a robust management structure, which is not limited to one or two people, along with effective systems and procedures, forward-looking business plans and watertight budgets.
Privately owned businesses looking for a sale need to be ‘transaction ready’ to ensure they are in the best possible shape to attract the right buyer at the right price. This is even more important in an unpredictable market as buyers can quickly lose confidence.
At Grant Thornton, we invest time upfront to get to know each business we work with, looking at ways to strengthen the management team, build a robust business model and financial systems. Working closely with the owners, we also review past performance to identify any issues and look at how these can be dealt with going forward so the business is fully transferable. However, it is not just about the transaction. Nurturing long-term relationships with the ambitious businesses and individuals we work with means, we can support them to realise their full potential. We can help clients connect with the wider community to broaden their customer and supplier bases and create new business opportunities to enable them to fully thrive.
Sale is not the only option open to owner managers looking for the next step for their business. Our team has supported many successful AIM listings and management buy-outs but the one thing that remains constant with all these transactions is that each business has gone through the same rigorous preparation process to ensure they are deal ready.
Despite the post-Brexit uncertainty, confidence in the UK remains. Larger national and international organisations are eyeing up opportunities to acquire polished UK companies at a good price. Those companies across the region that can position themselves correctly will reap the financial rewards for their owners, along with continued growth and success for the business itself.
About Darren Bear
Darren is Partner at Grant Thorton and leads a team of 25 advisory people focusing on lead advisory, transaction support and restructuring. Based out of Cambridge, technology remains a core sector as demonstrated by a number of deals including the sale of Sequel Business Solutions and MBO of Validus IVC.
However with a focus on the central and eastern region, our transactions cover all sectors and Darren has completed recent deals within the food and consumer, manufacturing and distribution, support services, healthcare, technology, and property and construction sectors.