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Structuring your sale

Structuring the Sale of your Business

There are several ways in which the sale and purchase of a business can be structured to fit with your objectives and those of the buyer. The buyer will usually seek to offer a structure which de-risks the purchase for them whilst making their offer appear as attractive as possible. Ultimately, your objectives are key in deciding the most appropriate structure to achieve maximum value.

Some common deal structures are as follows:

Cash on Completion

This is the preferred method for most sellers as it provides a clean exit at a firm price. It can be helpful to the buyer in some circumstances as it can give them clear control to make any changes they wish within the business. Issues of handover would need to be dealt with and full completion may be deemed at a later date post completion of the handover.

Deferred Consideration / Earnout

There may be a cash element on completion with further “deferred” amounts to be paid. These may be linked to the delivery of handover objectives, to revenue or profitability targets or any other metric that the sellers and buyers agree on. The purpose of deferred consideration is to maximise the value of the transaction sharing the risk with the buyer and seller. It also allows for the purchaser to potentially pay some of the consideration from future profits and thus ease cashflow.

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Contact us for a no obligation consultation.

Sector Insight

Unlock maximum value.
Get the right deal structure.
Smooth and efficient execution.
Maintaining confidentiality.

Our industry knowledge makes us well placed for identifying acquisition targets or potential acquirers. We have extensive experience in buying and selling businesses in the technology sector. Coupling this with our unique technical knowledge we are able to help de-risk the process, ensuring smooth execution and maximum value extraction.