Time to sell your business?
We specialise selling companies with turnovers over £1 million in the these sectors:
Henley Business Group does not sell retail or catering businesses
The decision to sell your business is one of the most important and complex transactions you are ever likely to undertake.
Henley Business Group will ensure your business is properly appraised and then expertly presented to the widest possible audience of relevant purchasers. Sales details will be circulated to the 5,000 potential buyers in the UK and overseas on our database. Through our sales website and using leading industry websites your business with be given maximum exposure in the marketplace.
With over 40 years industry experience, we have a proven sales process which commences with preparing an illustrated Information Memorandum. This is followed by a focused marketing campaign to engage with around 80 potential buyers. We then organise and attend meetings with about 20 potential purchasers. We expect to receive around 5 offers and negotiate Heads of Terms with the one selected by the vendor.
You should only entrust your business sale to a professional Mergers & Acquisition Specialist with the necessary skills and experience to facilitate a successful outcome.
There is further information about our sales process on the Business Sale Process pages and we have also prepared a free downloadable Selling Guide with recommended dos and dont's.
We provide Experience and Leadership
Most valuations use a multiple of one of the key figures in the financial accounts. To show these relationships, the outline Profit and Loss Account structure left may be helpful. (VAT is excluded for these purposes).
THE MOST POPULAR VALUATION RATIOS
Multiple of Turnover is used when a telecoms service provider is selling a customer base to another service provider. Very rarely used for any other type of transaction.
Multiple of Gross Margin is often used when a manufacturing operation is being sold with the intention of relocating it in the acquirer's plant. In the case most of the existing overheads will be absorbed in to acquirer's existing overhead structure to provide cost savings. Typical multiples are between 1x and 1.5x.
Multiple of Operating Profit. For many years, this was the most often used ratio in the UK, sometimes referred to as EBIT (Earnings before Interest and Tax). Typical multiples are between 3.5x and 5.5x.
Multiple of EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation). As Depreciation is a non-cash item, this ratio has become the most frequently used as it more accurately reflects the cash generation. Typical multiples are between 3.5x and 5.5x.
Net Asset Value on the Balance Sheet (Share Holder Funds) is often used in Asset sales plus an amount for Goodwill. The amount paid for Goodwill is influenced by the strength of the customer base, the reputation and uniqueness of the products.
Multiples are significantly influenced be the state of the economy, both national and international. Hence, 2008 and 2009 were very bad years. 2014 and 2015 appear to be amongst the best. Costs which will not continue after the change of ownership can be excluded to arrive at an Adjusted Valuation.
SURPLUS CASH - Most businesses are sold on a 'cash free and debt free' basis. Any surplus cash can be taken as a dividend before the sale is completed. Alternatively, it may be sold on a pound for pound basis and therefore you should benefit from a lower tax charge. Your accountant must advise you on all taxation matters. Sufficient cash must be left in the business for it to continue to meet its obligations at the time of sale.
Henley Business Group would be please to provide a valuation opinion if you provide us with the most recent Statutory Accounts and a forecast for the current financial year.