Business for Sale Blog - News and views on buying and selling businesses

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:

• Mobile – particularly location-based devices and applications
• Energy and green technology
• Micro devices and nanotechnology
• Online video
• Social media
• Search engine optimisation

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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It’s prediction season again; one just has to glance through any financial or business publication for lists of what’s going to be hot or cold in 2008, which shares are going to explode and where to buy or not to buy your next investment property.

As far as I can see, the only sure thing is that there will be a massive shakeout of futurologists.

But on closer inspection, if we limit… Continue reading

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It looks like the Chancellor is going to have a busy New Year with the Northern Rock crisis and problems over the business community’s opposition to the CGT reforms.

Continuing uncertainty over the scope of the Capital Gains Tax reforms have been exacerbated by the Treasury’s decision to delay any announcement until the New Year. Whilst uncertainty is never a good thing in any… Continue reading

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The current slowdown in the M&A marketplace now gives business owners a chance to look back and take stock after the breakneck pace of mergers and acquisitions in 2007.

Despite the recent trend towards corporate acquisitions, the majority of firms seem unable to deliver the full added-value that their takeover calculations had promised. Only nine per cent of mergers and acquisitions in Europe over the past three years have achieved… Continue reading

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