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Shield's M&A Hot Tip |
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This month: |
| - Shield's WWT deal - Shareholders, know why you need to "Be Dispensable"? |
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NEWS: Travel Angels spread their wings with acquisition of luxury travel company WWT, in a deal handled by Shield |
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WWT specialises in tailor made and luxury holidays, including experiences as diverse as Christmas with Penguins in Antarctica, and Wolves and Bustards watching in rural Spain. The parties were brought together by Shield Corporate Finance, who have considerable experience in the travel and leisure sector. More on the deal |
M&A HOT TIP: "Shareholders, know why it's vital you're dispensable?" asks Shield MD, David Young |
| Owner-managers often ask us "What are the most important things I can do to maximise the value of my business when I come to sell?" That's always a good question to have, because it shows they are already thinking about managing value, rather than just managing the business. |
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But it's not an easy question to answer. |
Top 5 Tips for Selling a Business? |
Before we get excited about maximising value in the sale of a business, let's be sure that you have something to sell. |
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The owner-manager who is a one-man band obviously doesn't. |
| Buyers worry what will happen to an owner-managed acquisition target when the owners are no longer there |
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| If the owner-manager is the one and only salesperson, or has critical production know-how, will the business survive his or her departure? Anything short of a clear "yes" to that, and you may well have a failed sale on your hands. As an advisor, I have learned this the hard way. |
Remember: buyers buy the future, not the past. |
| Your brilliant past is not a saleable asset if it might disappear with you once the deal is done. But even if you clear the saleability threshold, buyers' doubts about the future of your business after you have gone will reduce what they are willing to pay for it. |
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So you need to bottle that brilliance of yours. |
| You need to |
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In short, you need to work towards making yourself redundant. |
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Make sure you have a good management team in place below the shareholding managers, and demonstrate that they can run the business successfully by themselves. |
The most convincing way to prove that the business can thrive without you, is by having it thrive without you. |
| If you've spent time working in any big organisation, where making yourself indispensable is the key to long-term survival, this goes against the grain. But to maximise the value of your owner-managed business, you must, must, must..be dispensable! |
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Once this threshold need is agreed, we can move up to the next critical tip for selling a business: Set your sights on the best buyers. But that's for next time.. |
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If you are interested in any of the following questions then this book is for you:
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About Shield Corporate Finance |
 In 2001, David Young founded Shield Corporate Finance as an independent specialist advisory firm, to provide world-class M&A advice without regard to transaction size and without conflicts of interest. With a special interest in the keys to success in divestiture work, Shield is committed to producing remarkable results for shareholders. |
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'Increase and Extract the Value of Your Business'
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"Thanks to Shield's commitment and determination, the deal was concluded in only eight weeks on very satisfactory terms." |
| Nigel Pothecary Founder of WWT Image courtesy of Windows on the Wild |
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