Oxford Office - 01865 552 925  |  Witney Office - 01993 776 476 team@themgroup.co.uk

Buy a business

Buy a business

Buying a ready-made business rather than starting one from scratch can be less risky, providing existing sales are good, costs are under control and cash flow is healthy. It can also work as part of a strategy to grow your existing business. Like anything, buying an existing business comes with various advantages and disadvantages. We’ve listed here five important steps in the process for you to be aware before you make a decision;

1) Why buy a business – Strategic acquisitions can provide a rapid route for a business on its growth journey. Whether it’s about moving into new geographies, increasing market share, taking on different products and services, or growing through building specialist teams and gaining new skills, an acquisition can offer a quick solution to getting the business where you want it to be. By paying the right price and structuring the deal properly, an acquisition can also provide an opportunity to integrate a business that is not only already up and running, but has an established management team, set of skills and attractive customer base.

 

2) Valuation – Many factors affect the value of a business, including type of business, how well established it is, sector or market, location, profitability, and even the reason for the sale. Acquisitions should be approached like any other business process, which means thorough planning and implementation, and taking expert advice along the way. For a buyer looking to acquire a business, key is valuation, and buyers should seek professional expert advice from their advisor for help with this area, putting them in a better position to make a competent decision on whether or not to proceed with the acquisition. For the buyer, a professional adviser, such as The MGroup team acts as an invaluable buffer in what is an emotive process.

3) Funding – There remains significant appetite in the market to fund acquisitions through a variety of options and providers, and giving a vendor confidence of your deliverability will give you both the best chance of success in your acquisition strategy and the ability to get the best price on the deals you want. Depending on your financial resources and how risky you perceive your target business to be, The MGroup team can advise you on a range of funding options.

 

 

4) Due Diligence – After deciding which business you want to buy, you and the seller sign a document called a “Heads of Terms”, which set out preliminary terms agreed in principle by you and the seller. Then you need to carry out comprehensive due diligence. At this point you, your lawyer and accountant should be given full access to the business’s records. Any significant contractual arrangements included in the deal will need to be checked, as will loans and other financial arrangements, actual and pending disputes and intellectual property rights. If due diligence exposes any significant issues, your MGroup team will advise on renegotiating the deal, or even withdrawing depending on the circumstances. In summary, the process of due diligence enables you to find out that what you think you’re buying and what you actually buy, are the same thing. And, crucially, whether you’re being asked to pay a fair price.

Get in touch

Mark Crossfield
Corporate Finance Partner
m.crossfield@themgroup.co.uk

Ian Walker PDipBPM, AIFS
Senior Manager, Corporate Finance
i.walker@themgroup.co.uk

Geoff Pinder BSc (Env. Science)
Senior M&A Advisor
g.pinder@themgroup.co.uk

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TESTIMONIALS

I am very grateful and happy to be working with the MGroup. Our main contact is Jessica Mason. She has been fantastic to work with. We are a USA based company expanding into the UK. I have absolutely no experience dealing with VAT and other tax laws regarding the UK. Jessica has held my hand every step of the way and explained things and done detective work to help get the job done. There is no way I could manage this business without her help and her guidance. I would highly recommend her and her firm, the MGroup to anyone.

Kristin Garrett-Jarvis, CFO -  InfiniteAloe UK Ltd

"My company was recently introduced to the M Group because we undertook an MBO and they advised us to a successful conclusion. As part of this exercise they undertook due diligence work to show the lender that the deal would be fundable. In my view the standard of their work was excellent and I would recommend them to other potential clients. Many of the bigger professional firms no longer put their client’s requirements and interests first, they tell you what can’t be done not what can. I am glad to say that M Group are refreshingly different in this respect."

Simon E Hersh, FD – NS Optimum Ltd

"Mr Green has served as the personal tax accountant for my wife and myself since 2013. He has always been diligent and scrupulous in preparing our annual tax returns. He has also dealt efficiently and successfully with the Revenue Service on my behalf, regarding a charitable business account. I am pleased to recommend him wholeheartedly to any potential client."

Professor S Gordon

“Without a doubt, I recommend speaking with The MGroup. They are very knowledgeable, very understanding, have a good feel for our business and accommodate us quickly when we need help. We frequently get approaches from other accountancy firms and I tell them that we have no need to look elsewhere as everything is catered for very efficiently by Peter Smith and his team. I couldn't fault them."

Peter MaceManaging Director, TT Concrete

“Fortunately, when we were ready to expand our company to the UK we were referred to The MGroup. As a North America based enterprise we had little knowledge of UK business and tax matters. The MGroup helped us with everything from compliance and payroll regulations to establishing a banking relationship. The staff members are very responsive and we continue to rely on their support as our UK operations grow.”

Laurie Diaz, V.P. Corporate Controller, Yardi Systems

“Mark has given me excellent Corporate Finance advice and support for 3 years and I would thoroughly recommend him. He is very tenacious in finding suitable companies to acquire and then good at negotiating and putting deals together, including the all important funding. He is also very innovative in finding solutions to issues arising along the way.”

Mark Swaby is a Management Buy In client

“I used The MGroup for the first time to buy another Drainage Company to add services & coverage to my own. Mark and his team give a top rate service from start to end and we achieved the purchase within 5 months – good honest, knowledgeable advice from people who know their stuff.”

Paul Marshall, Unbloc

"It is always a pleasure dealing with the M Group as they provide immediate assistance when we need it and are always prepared to go the extra mile to provide an excellent service to their clients. I have no hesitation recommending them and we have been extremely satisfied for many years."

Mr D Rist, Kennington Flooring Limited

""The MGroup have really been there for me and my business through the good times and the more difficult ones. Their advice has always been spot on, and has really helped me to plan ahead and to consider angles on decisions which I might not have thought about otherwise. As well as being admirably clear and straightforward, everyone I have dealt with there has been friendly, patient, and thoughtful, and has really taken the time to get to know my business."

Jessica Harvey-Smith, Debate Chamber Limited

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