Diverco sells your business confidently and confidentially

Tel: 01905 23383 | Fax: 01905 357180 | Email: info@diverco.co.uk

Mature couple looking for information on selling their business
Sell my business

Timing is critical when selling your business and often owners get distracted, sales drop and things start to spiral...

Selling my business

Valuing my business

Sometimes we have to reconcile expectations. It's not our approach to tell a business owner what they want to hear.
Valuing my business

Free consultation

To understand your needs we offer a free and totally confidential initial 'face to face' meeting at a private location.
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Meet the Diverco team

Our dedicated team of highly experienced directors are always close, operating from ten regional offices.
Meet the Diverco team

Questions & answers about selling a business

Is my business saleable?

Most businesses are saleable. Areas where difficulties arise are loss making companies, those in terminal decline and those where all the information is held, and work is carried out, by the owner.

How long will it take to sell my business?

It is unlikely to sell within 3 months and most likely it will be 6 months to a year but it can often be longer, particularly if during the selling process there is an unexpected event or a past issue coming to the current management's attention, which is then likely to pause the process.

What are the options for someone taking over the business?

There are many options which can include existing management buying the company, maybe with outside assistance, another business or high net worth individuals. It is normally tax efficient for this to be a share sale but sometimes the assets of a company are sold. The Diverco free initial consultation would cover the various options.

What is an MBI?

MBI (Management Buy In) is where a manager or management team is brought in from outside to buy the company and manage it.

What is an MBO?

That is where the existing management in the business buy the business from the current owners. The acronym stands for Management Buy Out.

What is a BIMBO?

This is where somebody from outside the company buys the company with the support of some of the existing management and the acronym stands for Buy In Management Buy out.

Is now the right time to sell the Business?

The right time is when the owners for whatever reason have a desire to sell. There is no other right time. There are however the wrong time to sell a business. This would be when the outlook for the company is anticipating lower sales or reducing profits. Never try and sell a company when it is peaking in performance as inevitably it will have gone over the top either by the time you decide to sell or have interested enquirer's.

Is the sales process confidential?

Yes it is. Diverco ensure that the initial documents to entice purchasers cannot identify the company. Detailed information is only sent out to those interested parties who have signed a non disclosure agreement and we ensure that there is a confidential means of communication between Diverco and the seller.

What is an NDA?

An NDA is a non disclosure agreement, which is signed by an interested party seeking additional information and restricts the use of the information purely for acquiring the company and cannot be disclosed to other parties other than their advisors.

Can I restrict who gets the information?

Yes. Most companies will have a list of companies or individuals they do not wish to sell too and these companies will not be contacted. In addition, most clients like to see the details of companies who are showing interest prior to any detailed information being sent to them.

What is an IM?

This is the Information Memorandum which covers the history of the business and its current position with some financial information and the reason for selling, but does not contain important confidential material such as customers. It is sent to interested parties who have signed an NDA.

Do I need someone to sell my business?

Yes you do, but you would expect us to say that. The reasons are that the seller needs to concentrate on running the business and not be over diverted in selling the business. He/she will have an idea of some of the people who might be interested in buying the business but this is normally limited to suppliers, customers, friends and competitors and by no means exhaustive. The seller is also not able to contact other possible purchasers on a confidential basis and then also has the difficult negotiations on price and structure of the deal. Selling a limited company is complex.

Who is likely to buy my business?

Whilst for some businesses there will be an obvious purchaser. In the majority of cases we find that the ultimate purchaser is unknown to the seller prior to putting the company up for sale.

Do I need other professional support?

It will be important to have a specialist corporate lawyer who deals with mergers and acquisitions, but they are not normally required until an indicative price has been agreed with a purchaser, but a number of deals fail because of non commercial lawyers. Also, an accountant maybe required to ensure the sale is tax efficient.

Are the Diverco brokers trustworthy?

All Diverco's Regional Directors are highly experienced sellers of companies. Most of whom have bought and sold their own companies.

What is my first step in selling my business?

The first step would be to make contact with Diverco who will arrange a free confidential consultation either on or off site with a Regional Director who would quickly gain an insight into the business.

How is the company marketed for sale?

An analysis of likely purchasers is carried out and the teaser document is sent to them as well as being sent to the extensive data base of possible interested parties. A brief anonymous summary can be included on the web site.

What is a teaser document?

This is normally a short paragraph to elicit enquiries from interested parties but the company for sale cannot be identified.

Do you put a price on the company?

No we don't. Whilst we are obviously willing to discuss with the seller the likely offer they are likely to receive, the actual price will depend on the buyer.

How is the business valued?

There are a number of factors that are taken into account in the valuation of the business. Obviously includes the recent yearly profits, adjusted for any exceptional receipts or payments. The value would be affected as to whether the company is growing with the improving margins or is static or declining. This will be reflected in a multiple and will depend on the sector and size of the business and goodwill. Added to this will be any surplus assets which could include land and buildings, surplus cash or excessive working capital.

Do I need to prepare forward plans and budgets

In most cases, this is not necessary as the purchaser will have their own plans and ideas. It can also have a disadvantage in that a purchaser may insist part of the purchase price is dependent on achieving targets. However, for your own internal use we would encourage it.

What is deferred consideration?

Quite often part of the purchase price is not paid at the time of completion, but is delayed for a period of time and maybe dependant on the company achieving certain results in sales or profits.

What is Due Diligence?

This is where the purchaser will be carrying what is termed Due Diligence in order to understand all the issues within the company and it will cover commercial, legal, financial, tax. It takes the form of a number of pages of detailed questions seeking information which have to be answered by the seller.

What is Heads of Terms?

Heads of Terms is normally a signed document by both purchaser and seller and outlines all the key points that will be in the contract and will include the intended purchase price and structure of the deal. It is important to get as much agreed information into this as possible.

What are Warranties?

These are guarantees given by the seller to the purchaser covering various matters and whilst they might appear quite onerous, the seller in considering them needs to assess the likelihood of a claim.

What is a disclosure letter?

This is the formal response to the Due Diligence enquiries bringing to the attention of the purchaser any items that they need to be made aware of in the normal course. By disclosing these facts, the purchaser cannot then claim on them should a future event arise with regard to them. In some cases a disclosed item will not be accepted by the purchaser.

What is an earn out?

This is where part of the price paid is dependent on the company achieving certain results in order to ensure that the management who needs to be retained for a handover period is committed to developing the business within the new company.

Where does the assistance from Diverco stop?

We assist the seller right the way through the sale process up to and including completion.