Acquiring a Business
“Strong work ethic, availability and ability to keep to the timetable whilst delivering an outstanding service.”
— Ken Bartle, Footwear chain backer to Jones Bootmaker, Shoon, Stead & Simpson and Oliver Shoes
If you’re looking to acquire a business, you’ll need a clearly defined strategic rationale – as this will become the driving force and help you to measure your success.
Are you considering an acquisition to complement or improve your company’s products or services? Perhaps you’re planning to develop and nurture the acquired business itself, for longer term success. Whatever your rationale is, our M&A experts at Accelve will make sure your acquisition happens.
Clarifying your Strategic Rationale
Before starting this process, you will need to get clear on your rationale with specific, well-defined reasons for acquiring your ideal target business. These reasons should also complement your existing business objectives and link to the key features of the business you’re looking to acquire. Once you have your strategic rationale down on paper, along with your criteria, we will optimise our extensive network and support you in your search, whilst using this to inform all decisions throughout.
Approaching your Acquisition Target
Approaching your target business is a delicate task – if you don’t get this initial interaction right, it’s almost impossible to move beyond this point. Furthermore, if you’re considering acquiring a particular company, you can bet that others have also thought to do and attempted the same, so it’s a matter of standing out and being crystal clear on your approach to really earn the seller’s trust. You can have confidence in our M&A experience to build rapport and share the right information with your acquisition target so that they take you seriously from the start.
Acquiring the right business can certainly fast-track growth, but such an opportunity will always carry risks, so be sure to onboard the right advisory team before you begin.
Making the Deal Happen
We will carry out the necessary due diligence for your target business, which consists of a detailed report of all the financial and tax, IT, operational, market and commercial aspects, to make sure your criteria is being met. This will then support our valuation of the company, which will formulate your offer – one that will be right for both you and the seller. We will also oversee the completion process, making sure that all stakeholders involved, including your legal team, agree to a timeline to make the acquisition a success.
The Alternative Non-M&A Route
Unlike many traditional corporate finance houses, we can also find and facilitate alternative non-M&A options to get you where you need to be. We believe this promotes a more transparent and honest appraisal of the benefits and drawbacks of any M&A opportunity. We will never shy away from telling you to walk away from a deal or identifying better, internal strategic changes that exploit your brand further for you.
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FAQs
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Our team are senior level deal doers with hundreds of deals under their belt. We are the trusted advisor for many businesses and have helped to successfully build and execute numerous acquisitions. The seller of the business will want to extract as much value on exit and likely be speaking to multiple bidders or alternative exit options. We will can justify reducing the asking price or seeking terms to protect yourself without losing out to another bidder. We have worked with most of the major sell side advisors and can help navigate you through the process. We will be available to you the whole way throughout the transaction whether that is late at night or at the weekend whatever it takes to get the deal across the line.
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A merger is when two or more separate companies combine to form one new legal entity and most or all original shareholders remain invested in the new company. An acquisition, on the other hand, is when one company takes over control of another company and so the stakeholders of the acquired entity typically exit in exchange for cash or loan notes.
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As we help our clients to takeover businesses according to their strategic rationale, we have no specification or limit when it comes to the type of businesses we help to acquire.
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Due diligence usually involves a detailed report being prepared on the target company's financial and tax, IT, operational, market and commercial aspects. Due diligence is used by investors or buyers to ascertain if the potential target company is suitable for their needs. It helps ensure investors or buyers get the right price for the target, mitigate risk and maximise returns. Quite often, the target company may also request a due diligence report to help get themselves ready for a potential sale or fundraise
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Yes, we can certainly help you raise additional capital via debt or equity and advise you on the amount of funding that is likely to be available to you. This would be based on the value of your company, the target company, or both.
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This can depend on how well defined your strategic rationale is and whether your target company is ready to sell or not. Therefore, the initial stages of the M&A process, including identifying a suitable target, can take several months but once this stage has been completed, the closing of the deal can vary between 6 weeks and 6 months depending on complexity of the deal.
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Company valuations or an enterprise value ("EV") tend to be based off of a multiple of a financial metric. The most common metrics used to determine the earning potential of a business are multiples of EBITDA (earnings before interest, taxes, depreciation and amortisation), revenue and sometimes assets.
The multiple for a specific company is influenced by its sector, trading and value drivers and position of the business within that sector, as well as the buyer/investor appetite at that moment in time. Buyers will pay more for better quality of management, scalability, intellectual property, earnings track record, cash dynamics, and a lack of dependencies, for example. A buyer will also often pay over the odds if it represents a strategic play and is bidding in a tightly run competitive bidding process.
The EV of a business is shown on a net debt or cash basis. Any surplus cash or debt in the business will normally be negotiated with the buyer by analysing and agreeing the level of working capital, as well as other assets within the business.
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Whilst we have specific sector knowledge as a result of the different deals we’ve made happen, we work with many different sectors, so our experience remains very diverse. This naturally means we bring unique insights to our clients, helping them to create robust business plans and completing the deals they want.
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Our fees vary depending on the scope of the engagement. Our corporate finance related fees tend to have a large component which is based on the success of a transaction completing. Our strategy advice fees are normally charged as monthly retainer fees or charged on an ad hoc time basis. Our fees are always tailored to your specific needs, ensuring we are completely aligned.
A selection of brands our team have worked with
Recent insights.
