VALUE & STRUCTURE THE DEAL
The asking price is not the valuation. A good business can still be a bad acquisition if you pay too much or agree the wrong terms. Before you commit serious time or money to an acquisition, you need to understand the numbers, the risks and what the business can genuinely support.
Confidential initial conversation. No obligation.
"THE SELLER WANTS £2 MILLION."
The purpose is to establish what the business can realistically support, not simply what somebody would like it to be worth.
WHAT WE LOOK AT
The customer outcome is: understand what you should pay and how the deal should be structured.
WE ARE NOT HERE TO JUSTIFY THE SELLER'S ASKING PRICE
Sometimes the right advice is to renegotiate. Sometimes it is to change the structure. Sometimes it is to walk away.
ARE THE NUMBERS REALLY THE NUMBERS?
Reported profit does not always tell you what the business will earn under new ownership.
The existing owner may perform roles that need replacing. Some costs may genuinely disappear. Other costs may increase.
Capital expenditure may have been delayed. Working capital requirements may change.
STRUCTURE CAN MATTER AS MUCH AS PRICE
The right structure depends on the business, the seller and your financial position.
BEFORE YOU MAKE THE OFFER
AND IF IT DOESN'T STACK UP?
New information can change the valuation. Due diligence can uncover risk. Funding terms can change the economics. The seller may refuse to move on price.
If the transaction stops making commercial sense, the right decision may be to renegotiate or walk away.
REAL DEALS. REAL STRUCTURES.
THE BUSINESS COST £1. THE ACQUISITION COST CONSIDERABLY MORE.
A £1 share purchase brought significant liabilities. Approximately £150,000 of additional group cash was invested before the company entered administration. A £1 purchase price does not make something a cheap acquisition.
£850K TURNOVER. £240K CONSIDERATION. £140K DEFERRED OVER 18 MONTHS.
The 18-month deferred period was too short and placed unnecessary pressure on cashflow. Don't just negotiate how much you're going to pay. Model when you're going to pay it.
THINKING ABOUT BUYING A BUSINESS?
We can help you understand what a realistic acquisition looks like and what should happen next.
Confidential initial conversation. No obligation.
BOOK A CONFIDENTIAL ACQUISITION CALL
Whether you are still defining the brief or already looking at a specific opportunity, start with a confidential conversation.
Confidential initial conversation. No obligation.
