Types of Business Sales
When considering your exit, there are a number of different deal types to think about. Below we share a number of different exit routes that are available; all of which we have supported clients through.
Types of Business Sales
Our senior partners have vast experience and knowledge in the sales process for business owners. Key to a smooth sale is the due diligence carried out, the preparation for sale and the business valuation. Preparation means that at the point we go to market, we are in a strong position to find the best buyer for your business and the right exit plan for you.
There are a number of deal structures we have experience of supporting. These include:
1. Selling a business
Planning your exit from your business is important for any business owner. Knowing what you want to gain from the sale, what is important to you and the timings for sale is key. This is why we place importance on the due diligence carried out, the preparation for sale and the business valuation so that everything is in place and clear at the point we go to market; for both you and the potential buyers.
By carrying this out at the start, ensures smoother progress further down the process and manages all parties expectations. The negotiation stage can be nerve racking for any business owner and the preparation beforehand makes sure that we achieve the best deal in optimal time scales for our clients.
2. Buying a business – Management Buy-Outs (MBOs)
We work with the existing management who are looking to acquire the business. The management team is often the best buyer as they know the business. This means they are usually the best people to take the business strategy forward. However, if the business is under under-performing, poorly managed or is needing a succession plan due to the position of the existing management team; a management buy-in or trade sale may be preferable.
Other types of MBO’s we support include:
Vendor initiated Management Buy-Out (VIMBO)
A management buy-out, but this is initiated by the vendors.
Buy-In Management Buy-Out (BIMBO)
A management buy-out when a combination of outside managers and current employees together, buy the business.
3. Buying a business – Management Buy-Ins (MBIs)
We work with managers or a management group from outside the company who will lead the acquisition. The buyer is either found or communicates their interest in acquiring the business. If you are interested in selling and an MBO is not preferable a buyer must be found. The services of a business broker to identify and discreetly approach potential buyers can greatly increase your chances of a successful sale.
A deal is structured with an initial payment and with a further payment only upon the completion of set performance indicators. The business owner normally continues to work with the buyer through a prescribed transition period.
The Shareholders agree to cash out a shareholder (or shareholders), often by borrowing against the value of the business.
Advice on the type of business sale for your exit
Managing the sale of ProtecX to Burlington Medical
“I can’t commend the team strongly enough for their incredible efforts in securing such a high profile buyer for this business, the process was arduous but you expertly managed the transaction and without your hands on support at all times, I doubt this business sale could have come to fruition. I would recommend Opus to any business owner considering selling their business”