We speak to these financial advisers on how they help businesses to sell
Who are you?
Jeremy Furniss, partner of Livingstone Guarantee.
What do you do?
We advise owner managers like you, venture captalists and large groups on selling and buying businesses.
Why should I care?
Because most of you will only get one opportunity to realise the value of your company and we have a huge wealth of expertise to leverage the best possible price.
What can you do for me that I can’t do myself?
We’ll have a better idea of potential purchasers, both in the UK and globally, and we’re experienced in structuring deals. In addition to being enthusiastic brokers, we act as a buffer to help protect relationships and confidentiality. This also allows us to create competitive tension between rival bidders.
What mistake will you prevent me making?
A lot of businesses like yours respond to approaches and negotiate one-on-one deals without testing the market. It never makes sense to talk to a single buyer: in most deals we manage the highest price is 50% more than the lowest. Many people are also too open and there are a lot of tyre-kickers out there without genuine intent who are simply gathering information.
How will you save me money?
Aside from getting you the best price, we’ll structure a taxefficient deal. Purchasers will offer you shares, but shares should be the icing on the cake at the most. Our focus is on getting you cash and with as much tax relief as possible.
Do you specialise in any particular sectors?
Yes, we’ve got six teams with immediate knowledge in the following sectors: engineering and electronics; food; manufacturing; leisure and retailing; support services; technology and media.
Give me an example of a sale you’ve managed this year.
We sold a company called Automotive Technik, which acquired the rights to manufacture an Austrian armoured vehicle in 2000 and had raised £2.5m of venture capital and built up an impressive order book. There had been a small number of approaches but we felt there could be more interest. We marketed the sale and then drove two rival purchasers very hard and finally leveraged a £25m sale, which far exceeded the anticipated value.
Why should i trust you?
We wouldn’t want you just to take our word for it. Integrity is the very nature of our business and we’ll always ask prospective clients to speak to any of the 300 companies we’ve worked with.
How will you value my business?
Fundamentally on profitability. Typically, we value as a multiple of EBIT (Earnings Before Interest and Tax) or EDITDA (Earnings Before Interest, Tax, Depreciation and Amortisation). We’ll also factor in how other people or the stock market has valued similar businesses. Profitability will also be considered on its sustainability and the potential impact of new ownership, as we’ll always ask purchasers to share the synergistic benefits of a takeover in the price.
Lets talk money. What will it cost me?
It depends on the size of the transaction. We’ll take a 2% to 3% success commission for a £5m sale and would charge a retainer of between £25,000 and £30,000 up front. However, commission percentages are lower for larger sales.