Are you transaction ready?

 In Best Practices

Divestment and Investment opportunities will come along when they are ready to do so. It pays to be ready by building Transaction Readiness into your daily working practices.

Transaction Readiness: noun A state where a you can present to a potential acquirer/ investor and i) complete in the shortest time and ii) maximise the valuation potential.

It is assumed that at some point shareholders of a business will seek investment (VC/PE/Banks) or divest their shares (trade sale/MBO/VC/PE). This may be driven by a strategic plan or a direct approach; either way being Transaction Ready means you can maximise the value of your business and reduce the processing time of a transaction.

Getting Transaction Ready is something that should start now and be built into your business philosophy.

Steps to transaction readiness diagram

The diagram above captures 10 key areas that require focus in order to be Transaction Ready.

We explain 3 of them here:

Have a Robust Business Plan & Renew Each Year.

Not only does this keep the business focussed it will enable an investor to understand where the business has come from and where it is headed. The plan needs to be in a language everyone can understand and have a mix of the realistic and aspirational.

Empower Your Management to Lead

Critical for 2 reasons: 1. You will be busy during a transaction process and 2. if you are exiting the business, or the sole pivot of the business, you need to be able to point to team members who can run the business when you leave.

Address the Big Issues Today

These tend to take time to fix, otherwise they can cause a drop in business valuation or worse; cause the transaction to fail! This is a very costly and painful experience, which you should avoid.

At Premier, we have a track record of advising clients on Transaction Readiness prior to a funding or sale process. Every scenario is different, however it is never too early to discuss Transaction Readiness.

Please contact us if you would like more detail on the points raised here or to discuss your own scenario.

Rupert Lewis of Premier Corporate Finance

Rupert Lewis works at Premier Corporate Finance’s Manchester Office.
He has extensive knowledge within the TIC (Testing, Inspection, Certification), FM/Support Services and Retail sectors.

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