Buying a business is not like buying a car. Get it wrong with a business and it is likely to seriously hurt your wallet. So how can you tell if you are looking at one where the wheels might fall off? Nick Pritchard from Transaxman ltd has helped us put together a few examples of what to look out for and how to assess the true profitability… Continue reading
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First there was retirement relief, then there was business asset taper relief, and now there is entrepreneurs’ relief. No doubt the next government will try something else! The latest relief has been introduced following the uproar from small business owners who felt that the proposed 18% CGT was an unfair tax levied when they sold their businesses to fund their retirement.
The new relief, available from April 6 2008 will… Continue reading
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The other day I was talking to a business purchaser who told me he was just about to draft his Heads of Agreement for a purchase of a non-core business division, when his partner, who was having a chat to one of the target’s employees, unearthed a very nasty employment dispute between the owner and one of his sales managers.
At first they weren’t too concerned, after all the business was… Continue reading
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I got pitched a question last week from a principal of a software business.
He asked what were the most common valuation approaches used for valuing a small software company in a slow-growing market segment with revenues around £3m, growing 20% per annum. The company has ‘good’ technology though not ‘killer’.
We can come up with any number of valuation methods, but the only one that ultimately holds true for a… Continue reading
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There exists a glaring omission in the new Capital Gains Tax rules - they did not address earn-outs. Thousands of entrepreneurs who sold their businesses in 2005/06 have until 31st January to sort out a CGT tax nightmare for which HMRC issued no guidelines whatsoever.
This affected those people who are receiving part of their payment for their business in shares or loan notes as an earn-out (deferred payment). They had… Continue reading
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Well, what a surprise. Several hours after the chancellor announced the changes to the capital gains tax regime yesterday, a few very nasty details emerged.
The first startling discovery was that ‘entrepreneurs’ relief’ is in fact a misnomer. The 10% CGT rate turned out to be a lifetime allowance, an effective kick in the teeth for all serial entrepreneurs for whom a one-off £80,000 tax concession will not make a… Continue reading
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Alistair Darling today issued a major concession to the forthcoming capital gains tax changes due to come into effect on 6th April.
A new 10% Entrepreneur’s Relief is to introduced (similar to the old Retirement Relief), for business owners selling up and making gains of less than a million pounds. Under the CGT plans announced at the end of last year, the existing taper relief would have been replaced with an… Continue reading
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Getty Images, the market-leading stock photography vendor, is up for sale. Or, at least, it admitted it has hired Goldman Sachs to explore strategic options.
The US-based company was founded in 1995 by Jonathan Klein and Mark Getty, grandson of John Paul Getty, the philanthropist.
Having grown at a cracking pace, mainly through acquisitions, Getty is now the world’s largest supplier of video and digital pictures to ad and… Continue reading
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The importance of due diligence to the success of a transaction is often underestimated. I thought it might be useful to put together a few pointers to keep in mind while running a due diligence exercise on a business you are intending to buy. It is not a checklist – there are a few good due diligence checklists around – there is a good booklet available to subscribers of the… Continue reading
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Last year saw a wave of consolidations across the media and technology sectors, and my view is that 2008 will see this trend continue, perhaps even more dramatically.
My hot category picks are:
Many medium to large companies are struggling to keep up with new areas of specialist technology and organic growth strategies are just not… Continue reading
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