“BUYERS AND SELLERS”

What they really really want......

My own background...

• Recruiter

• Manager

• Director

• Chief Executive and also

• Since 1996 ‘Chief Scout’ M&A Pertemps/Network Group Holdings PLC

• Involvement in over 40 completed acquisitions High St. staffing - International search businesses

• Reviewed over 400 businesses for sale

Company Background...

Pertemps Ltd and Network Group Plc have merged ‘Network’ has delisted from AIM

Our stated intention is to grow from just under £500 million to £1 billion turnover in the next 5 years

50% of our growth will be targeted acquisitions

Mainly specialist staffing some selected high street particularly in South East

What does a ‘Seller’ look for…

Sellers want...

• Obviously a good price £££ !!?

• A ‘good home’ for the business they have built up

• A future for their staff

• To feel they have been treated fairly

They may also want..

• Continued involvement for a handover period

• An immediate exit

• A ‘White Knight’ to ride to their rescue in the event of financial distress

• Investment in their business and a partial sale

What they are not so keen on..

• Complicated deals

• Long ‘earn outs’

• A.I.M listed all share transactions ‘paper’

• Deferred consideration

• Excessive costs on professional advisors

• Feeling ‘sellers remorse’

What they should have (in an ideal world)

• Good advisors a knowledgeable lawyer and competent accountancy firm

• A firm idea of what they want from the deal. Often the buyer can be ‘guided’ by the seller

• The ability to see the ‘wood from the trees’ the deal with the most ££’s may not be the right one for them or their company

• Pragmatism...

• Being realistic on the pricing of their businesses in the market conditions they are hoping to sell in

Things to look out for?

• Try not to let the process of selling distract you from running your business

• Don’t get carried away with racy valuations .. A business after all is only worth what a buyer will pay

• The ‘devil’ is always in the detail, don't overlook the importance of getting good advice on the contact (Sale & Purchase Agreement)

“The Buyer…”

What a buyer mostly looks for:

• Not to look back and felt they have paid too much

• Strategic fit.. Either an entry into a new market, geographic location or as a useful bolt on to an existing operation

• Occasionally to buy a business or perhaps invest in a business to acquire or back an exceptional management team

• A bargain due to a quick sale required for personal circumstances or financial distress

They also probably want (in an ideal world)

• A profitable business or one that can become so reasonably quickly

• Has good secondary management or an influential junior director that wants to stay with the business

• A deal that is reasonably simple as they hate paying too many ££’s in legal and professional fees as much as sellers

• A business that is relatively easy to integrate

How does all this happen?

• Good advisors

• Sensible pricing

• Patience

• Communication & Transparency

So in summary..

The Buyer...

• Will want a business they can integrate. Without too many problems

• That has talented second tier management

• That is attractive not just on price

The Seller...

• Should be as flexible as possible in terms of deal structure

• Be aware that a headline valuation maybe not the most attractive

• Not to let the sales process distract them from running the business and it loosing value

• Make sure they have good Advisors

Any questions?