Director Retirement and a Share sale

There can be a multitude of reasons for deciding to retire, many  directors say that deciding to sell is due to being fed up with the running of the business, together with refereeing the HR issues and controlling finance, which is not what they were doing when they started out. Long gone are the days of being hands on, and they never wanted to evolve into what they are doing today.

Other issues are often relating to their own or a partners health issues, or the fact that they just want to change the pace at which they are working, or work less. 

Sometimes something is telling them that its time to do something completely different, maybe something they have never had time to do but always wanted to try doing or have time to explore.

Just because you have decided now is the time to sell does not mean it is going to happen within the timescale envisaged. 

At Jackson Taft buyers showing interest are vetted and awarded a quality score based on our own set of criteria. 

It is the buyers with the highest quality score that will be considered before all others. 

For instance we know the price expectation, and so we will be looking to engage with buyers that either can afford the expected price (and higher) or can borrow sufficiently given their own good standing. This is one element of the quality score applied.

Buyers can be very savvy and will sometimes try and tease out other interest to understand how strong the competition is. This is then used to see where they should pitch an opening bid which is usually below their evaluated bid level.

The issue with sale timescales is that we have no idea when the right buyer will come along when the marketing of the business starts. The longer we have for marketing in general, the higher the values that can be acheived. Vendor patience is necessary if we feel a better deal can be done or we need more time to negotiate without looking desperate. 

Some buyers like to understand a business over a period of time and will call for the next set of management accounts to confirm the business is still trading strongly before making an offer, which may disrupt the vendors exit timescale expectations. 

Business Brokers talk about maximising your business sale value, often our involvement creates a competitive environment that has the effect of pushing up values as each party competes to win. That said a business is only worth what a buyer is happy to pay for it, and whatever the value expectation the market will decide ultimately and that may be a different figure to expectation, the skill of the business broker should be to ensure the right buyers are on the final shortlist of bids to maximise bid values at the time and within the existing market conditions.

We work with your own professional advisors on deal structure to maximise your own taxation  situation. The saying "its not what you get, its what you keep" which is the true sum of the net value acheived. 

As a business vendor the sale of the business will need corporate legal represention. Before legal work commences we will assist with the initial draft agreement of the heads of terms of sale. This will go forward to the legal represenatives to review and redraft for any futher legal considerations before adoption. The heads of terms of sale are not legally binding but can assists the lawyers to understand the points of agreement reached in deciding to accept the offer made by the purchasers and reduce legal costs while various points are argued that have already been agreed

Again the point here is to ensure the legal agreement does not end up with onerous conditions for the vendor that have a financial impact before or after the transaction is completed and that the legal costs are kept under control preventing added costs.