APSCo hosts SME forum on M&A
APSCo held its SME forum yesterday on mergers and acquisitions. The event was hosted by Saffery Champness at their offices in London. Chaired by Jon Cox, recruitment director at CCL Global and Liz Prince, business manager at Amiqus, attendees heard from four speakers who demystified recruitment M&A.
Philip Ellis, owner of Optima Corporate Finance, spoke about deciding whether your business is saleable. He said that there are things an owner has to consider when selling a business, which can affect you risk and return. Obstacles that can affect risk are reliance on the owner and non-compliance (which can ruin a deal). Obstacles affecting return are client concentration (do you just have one or two key clients?), unrealistic value expectations and greed. He advised owners to sell a business when there is still growth to come as this will affect the sale price. Ellis advised that you use advisors when completing a sale as they have knowledge of the market and access to buyers.
Niraj Patel, partner at Saffery Champness discussed the formal processes that occur when selling or acquiring a business. He explained how to value a business and also discussed the structure of a sale, which can happen in two ways. It can either be a sale of assets, which is often more beneficial for the purchaser, or it can be a sale of shares, which is often more beneficial to the vendor. Patel says it’s important do some pre-sale planning, focussing on your key employees and maintaining their incentives.
Brendan Flood, executive chairman of Staffing 360 Solutions, Inc, discussed the company’s buy-and-build structure. Flood sold his own company, Initio, to Staffing 360; it was a business he had built with the intention to sell. He explained how the group decides on a company to buy: They don’t buy anything that’s broken and they only buy a company where the management team will stay on afterwards. The company has a no termination policy when it takes over, so no one worries about losing their job. Flood explained that they don’t compromise on their M&A policy, and they are happy to back out of a deal if they aren’t happy – they don’t want to get into what they call ‘deal fever’. He advised people who are thinking of selling their business to use advisors, but know what you want and to always ask questions before completing a deal: What are you going to do with my company? Why is my business important to your strategy? If you don’t like the answers you receive, walk away, Flood advises.
Chris Dunning-Walton, managing director of INFOSEC, plans to sell his business in four years’ time, and spoke to attendees about what they are doing to become ready for sale. Dunning-Walton told everyone at the company that they are gearing up to sell. He feels this has helped to make employees feel more involved, with a ‘unified vision’. His employees have told his that they can see the growth potential, feel valued and makes them feel that they are being invested in. Dunning-Walton explained that having a plan is important, so that everyone knows where they stand and knows the end goal.
The event was concluded with a panel session, where they explained that there is a market for all businesses who want to sell, irrespective of size, and they all emphasised the importance of culture when looking to sell a business.
APSCo’s next SME forum will take place in March 2017.