Business Valuations
A defensible number for a sale, a share transfer, a divorce, a share scheme or simply to know where you stand, plus the levers that would move it.
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Corporate finance
Buying a Business
An acquisition is the fastest way to grow and the fastest way to inherit somebody else's problems. The work that separates the two happens before completion.
Before you get attached to it
Buyers fall in love with targets. The purpose of due diligence is to be systematically unromantic on your behalf, and to do it while you still have the option of walking away or repricing.
The questions we work through:
- Are the profits real? Adjusted for one-offs, owner remuneration, related-party arrangements and anything that will not survive the change of ownership.
- Are they repeatable? Recurring versus ad hoc revenue, contract lengths, customer concentration, and how much of the relationship sits with the departing owner.
- What is the working capital actually like? Many acquisitions run into trouble in month three, not because the business was bad but because it needed more cash than the buyer expected.
- What is not on the balance sheet? Disputes, dilapidations, employment claims, unresolved tax positions, and commitments hidden in contracts.
- What happens when the owner leaves? Which relationships, which knowledge, and which staff go with them.
What you get from us
A scoped piece of work that fits the size of the deal: for smaller acquisitions, a focused review of the handful of things most likely to hurt you; for larger ones or where a lender requires it, a fuller report. Either way you get a clear list of what we found, what it means for the price, and what should be dealt with in the sale agreement.
Alongside that:
- A view on value, so you know whether the asking price is defensible
- Affordability modelling: what the business can service after the deal, under a realistic case and a bad one
- Funding structure, and the forecasts and business case your lender will want to see
- The tax consequences of the structure: share versus asset purchase, deferred consideration, stamp duty and VAT
- Working with your solicitor on the financial elements of the agreement, particularly warranties and completion accounts
After completion
The first hundred days decide whether an acquisition works. Integrating the bookkeeping, aligning the payroll, consolidating VAT and getting reporting on one basis quickly matters more than most buyers expect. We handle that too, because we will already know both sets of numbers intimately.
Talk to us before you make an offer rather than after. It is a much cheaper conversation at that stage.
Common questions
What is financial due diligence?
Verifying that the business you are buying is the business you were shown. We test whether the profits are real and repeatable, whether the working capital is sufficient, what the debt and debt-like items actually are, how concentrated the customers are, and what liabilities might be sitting off the balance sheet. It can be scaled from a focused review of the key risks to a full report, depending on the size of the deal and what your lender requires.
How much of the price should I hold back?
It depends on what due diligence turns up, but deferred consideration, earn-outs and retentions are normal and are one of the main ways of managing risk on an acquisition. Structure is usually a more effective lever than arguing over the headline price.
Should I buy the shares or the assets?
As a buyer, buying the trade and assets usually carries less risk, because you leave the company's history and its unknown liabilities behind and can choose what you take. Buying shares is often what the seller wants for tax reasons, and is sometimes unavoidable where contracts, licences or leases cannot be transferred. The answer affects price, warranties and stamp duty, so it is worth deciding early.
Can you help me fund it?
We prepare the numbers a lender needs: integrated forecasts, the affordability and covenant modelling, and the business case. We work alongside your bank or broker rather than arranging finance ourselves. Most acquisitions by owner-managed businesses are funded through a mix of bank debt, deferred consideration from the seller and cash.
More corporate finance
Selling Your Business
The tax structuring, preparation and deal support behind a sale, so the amount that reaches your bank account is as close as possible to the number you agreed.
Learn more →Exit & Succession Planning
The two to five years before you leave, used properly: reliefs protected, the business made saleable, and a plan for who takes it on.
Learn more →Management Buyouts
Selling to the people who already run it: structuring a deal the management team can afford and the outgoing owner is happy to accept.
Learn more →Raising Finance
Forecasts, business plans and lender packs that stand up to scrutiny, plus a clear-eyed view of what your business can actually afford to borrow.
Learn more →
What this service is. Tax and accounting work connected with
a transaction: valuations, tax computations and structuring, financial
modelling, due diligence reporting, preparing your records and figures, and
working alongside your solicitor and other advisers. Tax treatment depends on
your circumstances and can change.
What it is not. We do not advise on the merits of buying or
selling shares or other investments, and we do not arrange or broker
investments or finance. Where you need that, we will tell you and you should
take advice from a firm authorised or licensed to give it.