Corporate Finance
Business Sale
Company A received an offer from a trade purchaser to acquire the entire issued share capital of a specialist manufacturer of cleaning machinery. The business operated in a niche market which limited the saleability of the business to 6 or 7 trade purchasers.
The shareholders of Company A had not considered a sale previously but the interest of the third party led them to seek our advice.
Several meetings followed with the trade buyer. We did advise our client to also seek other interested parties, which they did under our supervision.
Under some pressure from the initial interested party an exclusivity agreement was signed which gave them three months in which to complete the deal. The other interested party was advised.
Upon the failure of the initial party completing on time there was ultimately detailed negotiations with both interested buyers and Greenhalgh & Co were able to increase the price from £2,000,000 to £2,800,000 with the bulk of the monies received up front rather than in deferred consideration.
This brief case study highlights the following:
- Take advice from professionals early.
- Prepare properly for sale and be organised in the approach to the deal.
- Allow professionals to deal with emotional, detailed negotiations as they are trained to be removed from deal tactics often employed by the other side.
- Accept that deals may be protracted but remember the potential end result.
This particular deal was somewhat complex and emotional for the shareholders. The information requested by both interested parties was detailed and onerous. The client was well organised, took advice onboard and this combined with our negotiating skills resulted in a very satisfactory deal completion.