"i sold my company and these are my tips for you"

Confidential© Equiteq 2016 equiteq.com

Growing equity, realizing value

Marc Jantzen

“I sold my company and these are my tips for you” A former CEO reveals what it’s really like when selling


Introduction

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My BackgroundPrice Waterhouse, Pepsico, Blue Sky

The company I soldBlue Sky: Performance Improvement Consulting and Training – Sales, Customer Experience and Leadership. 30 Awards in 7 years. Virgin, Barclays, British Gas…

Role17 years - Consultant – Managing Consultant – Principle Consultant – Partner – Managing Partner – CEO & Majority Shareholder

April 2013Sold to Capita for £12m (£7.2m up front, plus potential £4.8m on 27 month earn out)1.2x Revenue Multiple and 5.7x EBITDA multiple

Left in June 2015


What I learnt from having sold my company

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Take a look at the front of the queue

Plan ahead

The core business must come first

Maximising the earn out

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Confidential© Equiteq 2016 equiteq.com 4

1: Take a look at the front of the queue

Ask yourself

What next? - look 10+ years ahead

How much time off will you take?

Will you need to work?

What else are you truly great at?

How much do you need?

Is now the right time?

Who can I talk to that has been through the process?

Context

You will have killed the golden goose

You will be under restrictive covenants

You will have capital not income

You may want to do something new or different

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Context

2: Plan ahead

Tips

Your role: Delegate core operational duties and play a coaching / support role, not a doing role

Internal Process: Introduce more formal processes and documentation that will give a buyer an air of professionalism when they scrutinise your business. Store all relevant documents where they are easily accessible and put in place a process for keeping them up to date

Resources: Increase resources in finance (debt collection and reporting)

Advice: Use an advisor like Equiteq that can advise you how to maximise value

Family: Prepare your family for the fact that you will be working late nights and weekends. Don’t book any long holidays during key stages of the process.

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Executing a sales process will place significant demand on your time and that of your finance teamThe experience is rarely straight forward and can be an emotional roller coaster for you and the people around you

You have probably never been through the process before


3: The core business must come first

Tips

Focus: A decline in revenue and profit trend is the fastest way to ensure a failed sale process

Strategy: An acquirer will expect to see a clear stand alone growth strategy in place and your team need to know there is a bright future

Cultural Challenges: Culture comes to the fore within the senior team in two ways – your choice of buyer and how you handle the confidential nature of the process you are going through

Inner Circle: Choose the people you tell about the process carefully, you will not want the message to get out to your clients, staff or competitors – agree a consistent message for when asked

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Completion is merely a stepping stone not the grand finale

SPA Negotiation

Beware of hockey stick growth forecasts

Integration is a distraction and impacts performance

Run some scenario analysis on financial projections

Team

4: Maximising the earn out 4

Mindset and emotion


More resources

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"i sold my company and these are my tips for you"

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