LAST year definitely saw an improvement in the UK’s economy, perhaps remarkably so given the turmoil pre and post-Brexit.
For an owner-managed business in Northamptonshire which has survived the last five years and has an improving balance sheet and an optimistic future, but with no obvious succession plan for its owner, this means that we are seeing a meaningful return of the mergers and acquisitions market. In other words, there is an appetite out there to buy well-run profitable businesses and pay realistic prices. Also, there is some bank funding available for acquirers (including from some of the Challenger Banks who have set up over the last eight years or so).
We have acted for a number of business owners who have successfully exited their businesses for a variety of reasons: because of age related retirement or because they have taken their business on a journey that has reached a point that is beyond their capabilities and resources. Successful sales have been achieved that have allowed the current owners to exit for a premium price and which has given the business the security of a new owner who has the skills and resources to take it to the next level.
The increasing confidence in the UK economy has meant that entrepreneurial businesses are looking to take advantage of opportunities by making an acquisition, and their bankers now have the appetite and ability to provide funding, including some cash-flow funding. At Howes Percival we have had a very busy last quarter to 2016, seeing some very good prices paid for businesses we have sold for clients.
So now is a good time to think about selling your business. Buyers can see good opportunities for upside arising from the synergies of an acquisition, particularly where there is good reason to think that the economy will continue growing. There are still not that many good businesses for sale yet, meaning that those that take the plunge and look for a buyer are finding that they are in demand, setting up the ideal situation to find the right buyer at the best price achievable. Any successful disposal of a business will take several months to achieve, so for an exit during 2017 now is the right time to start planning. A call to your usual professional advisor, to take professional advice, should be your first step.
For more information, contact Gerald Couldrake at Howes Percival on 01604 230400 or visit the website www.howespercival.com
Gerald Couldrake
Partner
Howes Percival Solicitors
