Finance and Accountancy Briefing

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Your clients – buying and selling their businesses

Overview

This particular sector of the market place has been dull for some time. For most of 2009 activity levels have been on the low side. We have noticed an increase recently in businesses coming up for sale. We have been made aware that there are one or two reasons for the increase in this level of activity. The first appears to have come from buyers themselves. They have been sitting on their hands and cash for some time, and now consider that the time is right to look for alternative investments. Returns on an interest only basis have been poor. They are probably of the opinion that there are going to be a number of businesses that are reaching the end of their sustainable position as they are, and there might be some ‘rich pickings’. The buyers consist of existing businesses that wish to increase their profits and turnover by acquiring similar businesses, and also investors seeking to take on businesses that have struggled but are essentially viable propositions.

From a seller’s point of view, they do of course come from a different angle. There are clearly a number that, for personal reasons, have come to the conclusion that it is time to get out, although the timing may be wrong in view of the economic climate. Age and health playing a particularly important role in this decision.

There are also a number of businesses that have survived so far through the recession, but are rapidly reaching the end of their tether with regard to surplus fat, and trimming work forces etc. Many would easily benefit from joining similar businesses for potentially economies and savings. We have also been advised of one or two businesses that are being disposed of by insolvency practitioners, and business recovery agencies. Despite the doom and gloom about the economy there is, without doubt, some great opportunities out there, not just for the buyers, but also for the sellers.

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Tags: M&A, Acquisitions, Business Expansion, Capital Investment.

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