The Boomers are Retiring: Opportunities for Business Buyers
It turns out the average retirement age for Australians is the highest it's been since the 1970s. With apparently 20% of new employment since 2019 being people aged 55 and above!
Category: Acquisitions
Empty offices – no movement in rents!
John Kehoe wrote a piece in the AFR on April 24th about how the “public service ‘ghost’ offices should rile taxpayers.” Seems like a fair point, if employees are now predominantly working from home (WFH), with 57% of public servants in 2023 doing just that, why are governments and others not reducing or renegotiating floor space and rentals?
How to Sell a Business Lesson #9: What do I need to do to be ready?
The terms “Exit Ready” and “Investor Ready” have become very popular when discussing what might need to happen in the period running up to when an owner might wish to merge or exit their business.
How to Sell a Business: Lesson #8: What will it cost me to sell my business? Who do I really need to help me?
Selling your business is an important and significant life event. Few people get to build an enterprise that somebody else wishes to own and will pay a significant sum for.. Often, it’s the most valuable material asset you own and is the result of a lifetime’s work. When it comes time to sell or merge, it makes sense to do it right.
Exclusivity period-why bother?
An exclusivity period is normally agreed upon between the vendor and the buyer once the headline indicative terms are agreed. These terms are typically set subject to due diligence and contract. Whilst these terms are rarely binding (although there are exceptions), they do set a detailed framework for what is going to happen as parties move toward a completed deal.
What are tyre kickers and how you can avoid them
I was struck by the recent article in the Australian Financial Review by Yolanda Redrup, who quoted a frustrated CEO of Infomedia saying he had “closed the door on tyre kickers”.
I have witnessed this frustration many times, where vendors become sick of so-called buyers who turn out to be not serious acquirers.
How to Sell a Business Lesson #7: How to fairly structure a deal
Lesson #7 in our series, How to Sell a Business, covers the critical matter of deal structure. Once a willing buyer and a winning seller agree that they wish to transact, how should the transaction be constructed?
How to Sell a Business Lesson #6: How to sell a business when you’re not making a profit?
Businesses in Australia make an average profit of just under 10% of turnover. However, 20% of businesses in Australia don’t make any profit, that’s about 200,000 companies! In Lesson #6 we address the very real question facing those owners who are not making any profit, is my business worth anything?
How to Sell a Business Lesson #5: Does the Size of my Business Matter to Buyers?
Following on from “How to go about Finding the Right Buyer for my Business” we turn to the subject of size! Does it matter?
Size is one part of a buyer’s criteria; the short answer is that it depends on what they are looking for.
How to Sell a Business Lesson #4: How to find a needle in a haystack?
Having established that the odds are not great; that the potential buyer that knocks on a seller’s door is the most strategic acquirer for the business (Lesson #1). And that in any event, getting in the ring with a large corporate, without a clear strategy and some input is not optimal (Lesson #2). The question then becomes, if there are many more sellers than buyers in the Australian market in the next decade (Lesson #3), how do you find genuine strategic interest?
Current M&A Market Insights in Australia
The market is fluid and is moving constantly, never more so than now. The big end of town appears busy with deals galore, to quote James Thomson in the AFR on August 26th “M&A is back in a big way.”
How to Sell a Business Lesson #3: How big is the market for my business?
We established in lesson #2 that if a business is approached by a potential buyer (Gorilla) that the interest must be qualified and handled efficiently leading to an early indicative offer in writing, based upon the provision of adequate but limited information. We also determined that such a buyer, having knocked on your door is likely to have knocked on quite a few other doors, and is probably running a broader process.
How to Sell a Business Lesson #2: What to do when a 500-pound gorilla knocks on your door?
We established in my last blog that selling your business is likely to involve a major mismatch in terms of the scale and size of the likely buyer and that getting in the ring with them by yourself and without a clear strategy might not work out so well.
How to Sell a Business Lesson #1: Don’t get in the ring with a 500-pound gorilla!
The shareholders of established private companies in Australia, many of whom will be seeking an exit in the next ten years, ought to be aware of certain realities around deal doing and the market, I am going to unpack some of these over the next series of posts, which I hope people might find helpful.
Transaction activity softens but outlook remains strong
According to the recent Dealmakers report the global trend in M&A is down, by number of deals -15% and by value -18%. This is driven by the “fears of recession, rising interest rates and geopolitical uncertainties.”
There’s always something!