Before advising other people on buying businesses, Gavin Page spent years doing it himself.

A 130-year-old specialist manufacturing business with approximately £2.2m turnover, £500k EBITDA, a strong balance sheet and an established blue-chip customer base. It fitted directly into Gavin's existing buy-and-build strategy.

The company's 50,000 sq ft factory had to be vacated following the sale of the property. Moving more than 100 pieces of equipment and fitting out a replacement factory was expected to cost over £500,000.

Rather than looking at historic profits in isolation, the relocation requirement was factored into the price and structure. Total consideration was £500,000, with £180,000 paid on completion and £320,000 deferred over three years.

The initial £180,000 was raised through invoice finance against the debtor book. The remaining consideration was payable from future cashflow. Asset finance against unencumbered machinery was then used to help fund the relocation.

The relocation proved a major operational exercise. More than 100 pieces of equipment had to be transferred while production continued. The 2022 energy crisis then dramatically increased electricity costs and rising interest rates increased financing costs.

The purchase price is only one part of an acquisition. What matters is the total financial commitment after completion and whether the deal leaves enough capacity to deal with what comes next.

Two established Cheshire lithographic printing and design businesses with approximately £500,000 combined turnover and a highly experienced workforce.

Gavin's group was already spending more than £75,000 each year subcontracting lithographic work. The acquisition brought that capability, the skilled employees and customer relationships in-house.

Following an eight-month negotiation, both businesses were acquired for £40,000. £30,000 was paid on completion and £10,000 over the following six months. The initial consideration was raised through invoice finance against the debtor book.

Consolidating the businesses generated savings greater than the initial day-one consideration. Further duplicated costs were removed and sales grew by approximately 40% during the following 12 months.

The value of an acquisition isn't always contained in the target's standalone profit. Sometimes the real value is created by what changes when the acquired business becomes part of the buyer's existing operation.

An established print management business generating approximately £850,000 turnover and £90,000 EBITDA with a strong customer base and around 40 years of trading history.

Consideration of £240,000 was agreed, approximately 2.7 times EBITDA. £100,000 was paid on completion and £140,000 deferred over the following 18 months.

The 18-month deferred period was too short. The repayments placed unnecessary pressure on cashflow while the group was still settling into the acquired business.

Don't just negotiate how much you're going to pay. Model when you're going to pay it.

The cashflow impact of deferred consideration should be modelled before the structure is agreed, including the effect on working capital and the acquired company's ability to service the payments. Where appropriate, giving the business some breathing space before deferred repayments begin can materially improve the structure.

Some of the most valuable acquisition lessons only become apparent after the completion documents have been signed.