Month: September 2019

Whilst the ultimate intention might be to sell 100% of a business, there may be circumstances for an entrepreneur where a full disposal process is not the best option.  

The one common goal shared by most shareholders is to maximise the value realised from a disposal process. However, it may be too early for an entrepreneur to sell outright for lifestyle reasons with the likely outcome being to also retire from the business. There may be a number of owners with different exit horizons, or it may not be possible to optimise the outcome in a single transaction now. This might include for example, the business currently being overly reliant on a significant shareholder with no management succession plan depressing valuation. 

Sometimes, maximizing value can be best achieved in two phases with a partial exit now to allow a shareholder to personally de-risk and a complete exit at a later stage when further capital value has been created. Therefore, partial exits may be an attractive alternative to a full disposal either to a trade or institutional purchaser. 

Whilst private equity and other institutional investors had historically been nervous about providing funds for entrepreneurs to de-risk questioning their motivations, there has been a significant shift in thinking. There is now strong empirical evidence that management teams that de-risk actually over perform compared to peer businesses typically as a result of being able to take a longer term view rather than protecting short term performance as well as the support provided by an institutional investor. Accordingly, there is strong appetite from private equity investors to provide funds to allow a partial sale of a business (perhaps coupled with investment for growth or acquisition) and they will work with the management team, typically over a 3-5 year period, to grow the value of the business before seeking a full exit for everyone. With private equity typically targeting a return of 3x their investment, the expectation would be that the entrepreneur would receive the same return for the equity they’ve left  in the business. Depending on the precise deal structure, it may also be possible to structure a partial exit tax efficiently and benefit for 10% tax under Entrepreneurs Relief. 

Our corporate finance team have advised on a significant number of partial exits to institutional shareholders and trade acquirers and would be delighted to discuss your options with you. Contact our team on 01491579740. 

Whilst the ultimate intention might be to sell 100% of a business, there may be circumstances for an entrepreneur where a full disposal process is not the best option.  

The one common goal shared by most shareholders is to maximise the value realised from a disposal process. However, it may be too early for an entrepreneur to sell outright for lifestyle reasons with the likely outcome being to also retire from the business. There may be a number of owners with different exit horizons, or it may not be possible to optimise the outcome in a single transaction now. This might include for example, the business currently being overly reliant on a significant shareholder with no management succession plan depressing valuation. 

Sometimes, maximizing value can be best achieved in two phases with a partial exit now to allow a shareholder to personally de-risk and a complete exit at a later stage when further capital value has been created. Therefore, partial exits may be an attractive alternative to a full disposal either to a trade or institutional purchaser. 

Whilst private equity and other institutional investors had historically been nervous about providing funds for entrepreneurs to de-risk questioning their motivations, there has been a significant shift in thinking. There is now strong empirical evidence that management teams that de-risk actually over perform compared to peer businesses typically as a result of being able to take a longer term view rather than protecting short term performance as well as the support provided by an institutional investor. Accordingly, there is strong appetite from private equity investors to provide funds to allow a partial sale of a business (perhaps coupled with investment for growth or acquisition) and they will work with the management team, typically over a 3-5 year period, to grow the value of the business before seeking a full exit for everyone. With private equity typically targeting a return of 3x their investment, the expectation would be that the entrepreneur would receive the same return for the equity they’ve left  in the business. Depending on the precise deal structure, it may also be possible to structure a partial exit tax efficiently and benefit for 10% tax under Entrepreneurs Relief. 

Our corporate finance team have advised on a significant number of partial exits to institutional shareholders and trade acquirers and would be delighted to discuss your options with you. Contact our team on 01491579740. 

HMT has delivered a two day training course for junior members of the International Corporate Finance Group (ICFG), at our offices in Henley on the 17^th and 18^th September.  Eight junior team members attended the training including two people from Wintergerst (Stuttgart), two people from HMT and four people from Carmin (Paris).

The training, delivered by the HMT senior team was based around a case study, with the 8 participants working in small groups to produce a management presentation to sell a business to private equity.  The HMT senior team acted as mentors throughout the 2 day workshop, giving the participants a deep insight into working with private equity houses.

Andrew Ferguson from Maven Capital Partners presented to the attendees on Day 1 of the course, sharing his in-depth knowledge of how to structure a deal for private equity.

On day 2 of the training, the working groups presented their pitches to a team of external Private Equity investors, “Dragon’s Den” style.  The panel of investors assessed the presentations and gave invaluable feedback to the junior members.

HMT would like to thank the “Dragons”; David Rolfe from NVM Private Equity, Jamie Roberts from YFM Equity Partners and Julian Carr from Ethos Partners, as well as Andrew Ferguson, for their time and input into this rewarding event.

Beyond the academic purpose of the training session, this gathering has also helped to create personal contacts between ICFG members and strengthen both relationships within the network as well as the network itself.

Following some very positive feedback from the training session in Henley, the network is further committed to our ongoing training programme, including periodical sessions as well as sharing best practices and case studies between members throughout the year. The purpose of the continuing training programme is to improve customer service, develop recruitment and create and execute innovative cross-border solutions.

HMT has delivered a two day training course for junior members of the International Corporate Finance Group (ICFG), at our offices in Henley on the 17^th and 18^th September.  Eight junior team members attended the training including two people from Wintergerst (Stuttgart), two people from HMT and four people from Carmin (Paris).

The training, delivered by the HMT senior team was based around a case study, with the 8 participants working in small groups to produce a management presentation to sell a business to private equity.  The HMT senior team acted as mentors throughout the 2 day workshop, giving the participants a deep insight into working with private equity houses.

Andrew Ferguson from Maven Capital Partners presented to the attendees on Day 1 of the course, sharing his in-depth knowledge of how to structure a deal for private equity.

On day 2 of the training, the working groups presented their pitches to a team of external Private Equity investors, “Dragon’s Den” style.  The panel of investors assessed the presentations and gave invaluable feedback to the junior members.

HMT would like to thank the “Dragons”; David Rolfe from NVM Private Equity, Jamie Roberts from YFM Equity Partners and Julian Carr from Ethos Partners, as well as Andrew Ferguson, for their time and input into this rewarding event.

Beyond the academic purpose of the training session, this gathering has also helped to create personal contacts between ICFG members and strengthen both relationships within the network as well as the network itself.

Following some very positive feedback from the training session in Henley, the network is further committed to our ongoing training programme, including periodical sessions as well as sharing best practices and case studies between members throughout the year. The purpose of the continuing training programme is to improve customer service, develop recruitment and create and execute innovative cross-border solutions.