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Choosing to sell your Company needs good planning and positioning. You may need to prepare your Company for sale by looking at its composition, re-arranging debt and restructuring any group infrastructures. By implementing complex financial methods, we can make your company more attractive to investors and potential buyers. For more information, see Prepare us for Private Sale.
QIBD have experience in restructuring companies and their debt, preparing companies for sale, and indeed purchasing companies. Calling on our experience and knowledge enables us to design intricate financial models, allowing us to help acquire companies in all kinds of financial conditions; whether highly profitable, asset rich, cash poor, or distressed. If you feel you wish to sell-out to a competent buyer who will offer you the best remuneration or phase-out purchase plan and carry your company forward, QIBD is your solution.
In buying-out companies we are keen to work with the owners to create the best possible deal for both seller and buyer. We can structure phase-out purchases where the owner sells parts of his company over a period of time with the aim to sell all of the company at the end of the period. Alternatively, the seller may decide to sell the company to a dynamic and professional buyer who may boost the company forward whilst retaining a shareholding or honorary directorship within the company and gain further rewards down-track.
Furthermore, at QIBD, we can arrange Swiss financial residency for your sale proceeds and offer revised structure to existing shareholders planning to sell their shares to gain benefits by lowering tax on sale proceeds.
Structuring the correct purchase plan is paramount for the continued success of the business with its new owners and of course equally important to the seller to ensure that maximum gain can be made from its sale.
Whether the sale is structured as a merger, management buy-out or a straight forward acquisition, we are able to help plan the entire sale hand-over to enable a smooth transition and ensure the seller’s financial gain is protected, and the health of business lives on and grows under its new ownership.
Many acquisitions that we undertake are completed with a view to taking the business public inside a 5 year window. This appeals to many private company shareholders who are wishing to sell their businesses to a more energetic board that will continue to grow the business whilst retaining a small shareholding or debenture within the company, reaping a larger reward at IPO.
To discuss a sale or part-sale of your company in complete confidence, or to discuss any aspects of selling your company, we would be pleased to hear from you. Our senior partners would be pleased to discuss requirements over the telephone or invite you to visit us in complete discretion.
In buying any company, there are several major points that must be addressed and thought about before purchase. At quins finance, we work alongside many partners looking to buy companies, asking them to consider the following:
Due Diligence – on the target company and the market place, its competitors and market share.
Financing Strategies – how is the purchase to be financed? When purchasing a company there are many different financial structures and methods that can be adopted. It is not always a matter of writing out a cheque or getting a bank loan to purchase. At quins finance, we develop bespoke methods to maximise the buyer’s options.
Purchase Methods – A group structure, MBO or phased / structured purchase. International companies and trusts may be employed to maximise tax advantages.
Structuring – Purchase parts of a company or the whole group? How it is structured is extremely important to ensure that financing strategies and financing options are optimised and in the event of immediate turn-around, the structure must be ‘stand-alone’ and identifiable.
Accounting Systems – Understanding the accounting methods of the target company and ensuring that no historic ‘financial trickery’ has been used by the target company’s present owners to hype the values, or mis-represent the financial statements.
Staffing & Management – Installing your own Board and Chief Executive and deciding who is an asset and who is a liability.
Price Earnings Ratio – the key to successful acquisitions.
As well as the above, it is also important to keep an eye on your objectives. Is the purchase of the company to merge with existing business, buying out a competitor, or is the objective to restructure and grow the company toward a public offering?
In any event, you will need to have identified a competent Chief Executive and Board to work alongside the outgoing management. A purchase should be planned to ensure that the structures are completely understood, and will remain in place until the incoming management have had time to restructure to their own methods otherwise you could be buying a headless chicken.
Quins financehave access and experience in undertaking extensive due diligence on target companies and the individuals behind them. We can plan and help acquire the finance and funding needed to make the purchase and negotiate the point of entry.
Through our extensive international partnerships, we can ensure that you have the right people at senior executive level to ensure that the plan is effected with precision and discipline and all objectives are met on time. To learn more, please enquire.
The Merger motivation and its alchemy equation is 1+1 = 3. The main idea behind launching a merger or acquisition is to create shareholder value over and above the sum of the two companies. Its main reasoning is that two companies together are worth more than two separate companies. Fuelling this motivation for a merger are the following factors:
Mergers & Acquisitions, although often uttered in the same breath have slightly different meanings. Acquisition is when one company ‘swallows’ the target company and clearly establishes itself as the new owner. See Acquisition for more information on buying a company.
In a merger, two firms (often of equal size) agree to go forward as a single new company and become one. Both company’s stocks are surrendered and new stock (of the new company) is issued in its place. Mergers will need restructure and refinancing.
There are several types of mergers, each is fuelled by a differing motivation, although each sharing the same goal to become more efficient;
Horizontal Merger – Where two companies in direct competition with each other agree to merge.
Vertical Merger – Where two companies merge such as a customer and supplier for mutual benefit.
Market Extension Merger – Where two companies merge that sell the same products in different markets.
Product Extension Merger – Where two companies merge that sell different products in the same markets.
Conglomeration Merger – Where two companies merge that have no common business areas.
To launch, it is important to have the correct structure and objectives. It is essential to understand the process and to have the correct financing in-place. It may call for intricate financial structures to be implemented to ensure that control is not compromised in the new company.
To begin a launch or take the first steps towards proposing a merger with your target company, speak to QIBD first. With our financial expertise and our associated legal teams, we are able to effectively reach your objectives, swiftly.
For the management and senior executives who have put their life and soul into their company, protecting and owning it may become an attractive solution for future security and independence.
Launching a Management Buy-Out (MBO) is a leveraged acquisition, using the assets of the target company to raise the money for the purchase. An MBO will ultimately require financial sponsors or private equity. Where the management may struggle to raise this initial acquisition capital, QIBD can raise capital secured on the target company assets and look to the target company’s cash flow to secure interest and repayment.
Leveraged buy-outs are now common practice; in recent years, we have seen the age of the mega-buy out where companies have been bought and sold for hundreds of billions of dollars. Regardless of the amount, the principal remains the same.
The goal of any Management Buy-Out will be to strengthen the managers’ interests in the success of the company. MBO’s have assumed an important role in corporate restructurings beside mergers and acquisitions.
It is important to consider various factors when entering an MBO position; Fairness to Shareholders, Share Price, the future business plan and legal and tax issues. In order to ascertain the requirements of launching an MBO, it is important to hold a perfect understanding of your company, its shareholders, employees and customers. An expert overview is essential.
For financing, restructuring and launching the initial steps toward an MBO, please contact us in the strictest confidence where our team of expert financiers can advise you on every step of the process and begin to lay the building blocks of a successful MBO launch.
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