Blog – January 2019
We frequently have discussions with Tech owner-managers about the prospects of being bought by an overseas buyer. Conversations often stem from something that has been said (or all too frequently, ‘told’) to them about a pool of such parties waiting to get their hands on “a business just like yours”.
Here at Prism we have extensive experience of selling to both domestic and overseas buyers and yes, the latter can be a lucrative option – but for the right type of business. Unfortunately, it just isn’t realistic to believe that overseas buyers are going to be prime targets for every situation.
By way of example, if you are a small regional IT support business, one should look at it from the eyes of a buyer. If the buyer is without an existing presence in the UK, they will be concerned about:
– Who will run and manage the business for them
– Risk of losing key staff, with customer relationships and market knowledge
– Whether the costs of the process (generally higher for an overseas buyer) will be disproportionate to the benefits of the acquisition
To the extent that you can demonstrate the continuity of management (ideally having a second tier management team) and ability to scale the business quickly (perhaps utilising IP) these fears may be overcome, but there has to be enough “sizzle in the sausage”!
It’s always a good idea to take a step back and ask a few questions about your own business. If you were overseas with no pre-existing presence in the UK would you consider buying your business? Would you have the appetite to pay top dollar? If the answer is no, then you may need to look closer to home.
The key is finding the right buyer for your business and at Prism we go to great lengths to ensure we don’t waste precious time in pursuit of the uncatchable! We are realistic, put in the research and undergo the analysis ourselves to pave the way to reaching the buyers who will find your business most attractive and therefore be prepared to pay a good price.