Typically, a buyer will submit over 650 questions during this phase — spanning financials, contracts, compliance, HR, IT, tax, legal and commercial risks, and beyond. Often it is at this stage where deals can collapse completely, usually due to sellers not having the right strategy and support, causing delays and likely impacting value.

At EvolutionCBS, we’ve successfully managed 360+ transactions worth more than £2bn, and we know that how you handle due diligence can be the difference between a deal that succeeds — and one that doesn’t.

Here’s how we make sure our clients don’t just survive due diligence. They achieve the kind of successful completion they hoped for at the outset.

1. Prepare EarlyThe most successful due diligence processes start long before any buyer shows interest. At EvolutionCBS, we encourage our clients to get ahead by preparing early — ensuring their financial information, forecasts, and performance data are clear, consistent, and ready to stand up to scrutiny.

This early groundwork means that:

• Financial records are accurate and presented in a buyer-friendly format
• Forecasts and business plans are refined to address likely buyer questions
• Potential issues are identified early, reducing stress and delays later on

By preparing well in advance, our clients approach due diligence with confidence — ready to demonstrate the strength and potential of their business from day one.

2. Managing 650+ Buyer Questions — With Precision

Due diligence can feel overwhelming. Buyers typically request hundreds of data points and supporting documents, often revisiting topics multiple times. Our role is to project manage the entire process — so you don’t have to.

Here’s how we do it:

✅ Every question is logged, tracked, and responded to promptly
✅ All communication flows through your dedicated Client Director
✅ Progress is monitored daily and shared through a “Due Diligence Tracker”
✅ Weekly calls — often daily updates — ensure total visibility and control

This structured, meticulous approach is a major reason we maintain a success rate approaching 80% on all projects we take to market.

3. Maintain Momentum and Negotiating Power

Deals often lose value when due diligence drags on. Slow responses, inconsistent messaging, or disorganised disclosures give buyers the upper hand — or worse, cause them to walk away.

Our “Low Volume, Premium Guided Service” means we only work on a limited number of projects at a time, dedicating around 1,500 hours per client. This level of focus keeps momentum strong, reduces deal fatigue, and ensures you maintain control right up to completion.

4. Managing Private Equity Due Diligence — A Specialist Skill

Over the last three years, 66% of our deals have involved private equity investment — and half of those included a partial fundraise or equity rollover for our clients.

Why does this matter? PE buyers are among the most thorough and demanding when it comes to due diligence. They scrutinise everything — from historical performance to governance frameworks — before committing capital.

Our experience managing hundreds of PE-backed transactions means we know exactly how these buyers think, what they expect, and how to present your business in the best possible light.

5. Protecting Value Through to CompletionProtecting value isn’t just about getting through due diligence — it’s about how the entire sale process is managed from start to finish. Every stage, from initial preparation to final negotiations, plays a part in preserving the strength of your valuation and ensuring a smooth path to completion.

Throughout the process, we help our clients to:

• Maintain competitive tension during the early stages of buyer engagement
• Reduce the risk of price renegotiation through thorough preparation and clear communication
• Strengthen completion certainty by managing expectations and timelines effectively
• Position themselves for a seamless post-sale transition

By staying proactive and in control at every step, our clients maximise both confidence and value — right through to completion.

Why EvolutionCBS?

With over 2,800 active relationships across financial investors, private equity firms, trade acquirers, and advisory networks — and a track record of delivering an average 80% success rate, through our meticulous uncompromising approach — EvolutionCBS is uniquely equipped to guide you through the most demanding stage of the sale process, through its low volume, premium guided service.

Due diligence is where deals are won or lost. With the right preparation, structure, and expert guidance, it becomes an opportunity to build confidence, increase value, and secure the best possible outcome.

fraser.hodgkiss@evolutioncbs.co.uk
Get In Touch
www.evolutioncbs.co.uk
07957 834506
0118 959 8224

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If you would like a no-obligation consultation on the sale of your business or would like to discuss our Business Valuation Service, click here.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides them with pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment.

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment, we boast a market leading success rate with 14 year average above 75%.

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.

However, there is a qualification needed here. There has been a marked drop in the number of IPO’s and ‘mega deals’ and, sadly, an increase in the number of business failures – of both large and small companies.

The middle and lower-middle market has however been much more stable. Businesses in this sector of the market usually have less debt and offer greater potential to scale. This makes them an attractive proposition for trade and financial buyers alike as they pursue their strategic growth agendas.

After the massive post-Pandemic boost to dealmaking in 2021, the market began to settle in 2022 before being subdued by inflation, war, and general uncertainty – all factors that quickly impact deal making.

It’s important to remember however that these are global factors, and we see no decline in interest from international buyers. The UK has always been a key target country for global acquirers. This year it is the USA/Canada that has led the field moving Europe to third place.

M&A is a driver of economic activity and there is still an enormous amount of cash around looking for a home – despite rising interest rates. An article by PWC noted recently “Whether a company needs to transform its capabilities, supply chains or its ‘go to market’ approach, the market is impatient and one of the fastest ways to accelerate transformation is through M&A.”

The M&A market is also cyclical and reacts to uncertainty, putting pressure on deal volumes and valuations. This means that advisers may be more cautious in their valuations, and business owners should be prepared for a longer sale process as the due diligence part of a transaction is taking longer.

Opportunities for buyers and sellers

M&A provides companies with opportunities to address strategic needs that could be market expansion or capability gaps, both human and technical. Smaller to midsize deals are always the bulk of transactions; they carry relatively less risk, generally attract less regulatory scrutiny, and provide greater opportunities for growth.

That doesn’t mean that business owners should put a business sale on the back burner. Rather, they should use this time to get the business in the best shape to sell.

For example, focus on creating transferrable value. Maximise earnings, minimise risks and secure your most valuable assets, such as contracts, intellectual property, or skilled employees.

The latest EY CEO Outlook Pulse survey noted that 98% of CEOs anticipate actively engaging in strategic transactions within 12 months, an increase of 9% over the 89% reported in January 2023. Moreover, with interest remaining high, both trade and financial buyers are seeing the attraction of smaller deals as a means to diversification and growth.

This is a time for both buyers and sellers to consider the opportunities that 2024 will bring.

If you would like advice on whether your business is ready for sale, please call us on 0118 959 8224 or contact us at info@evolutioncbs.co.uk.

So how do you address the question of building future Equity Value into the business? Firstly, you must start with the end in sight by putting yourself in the shoes of the future acquirer and asking, “What does hold value in the eyes of a purchaser?” This will require some lateral thinking and ultimately a bit of putting your house in order, so to speak.

When deciding upon the value of a Company, acquirers will consider a range of metrics, as part of their initial assessment of where and why they see value in the business. Importantly, although there are many potential deal structures underpinning any transaction, the starting point for pretty much every business valuation will be to consider the perceived risk in the proposed transaction against the business’ trading fundamentals such as turnover, profitability, cash flow and net worth. Buyers and investors want to know what the balance is between ‘risk and reward’ and they’ll consider this against the backdrop of anything they can see, feel and evidence about the business that gives them confidence in its success.

As part of this exercise, alongside the proven training history of the business – as seen in its Profit & Loss data, the Company Balance Sheet will almost certainly feature highly in their assessment of risk. Buyers will look for elements they can see, including the Company’s Equity Value/Shareholders’ Equity, which give them reassurance as to the underlying substance and sustainability of earnings for the business. This indicates not only that the business’ liabilities can and have been satisfactorily dealt with over time, but also that the business has sufficient assets in the background to enable it to survive and prosper in difficult times.

As far as those liabilities are concerned, it’s not a bad idea to limit your exposure to current liabilities, particularly if the majority of these liabilities are loans/lines of credit, (in contrast to cash advances linked to future orders of products/services). Crucially long-term debts owed will feature in any sale, as typically most offers are made on a ‘cash and debt-free’ basis. Thought should be given to any deferred tax liabilities as these will need to be addressed by lawyers/tax specialists during the Due Diligence exercise.

Keeping a healthy amount of cash on the Balance Sheet is also not problematic – and a positive trend in the cash balance of the Company over a period of a few years will certainly do no harm and reinforce your Equity Value, as will ensuring your property, plant and equipment are not in a state of disrepair or dilapidation.

Intangible assets can also make a positive contribution, such as ensuring you have decent written contracts with clients and that any Intellectual Property (IP) is secure (or the relevant copyright is in place for any trademarks or patents) and thus can factor in the acquirer’s approach to valuation.

There are untold benefits to applying some of the above ‘financial hygiene’ in your day-to-day business operations, including the ability to attract Growth Capital. The Deal Team at EvolutionCBS has an excellent track record of supporting and assisting Company owners/shareholders in securing Growth Capital investments.

For context, Growth Capital is essentially funding/investment, which can be utilised for future infrastructure and growth plans. Where there is a demonstrably profitable trading history and a healthy Balance Sheet (including Equity Value), then Growth Capital funding can be obtained from various sources, such as banks, Private Equity firms, or other financial investors and institutions.

In one example, EvolutionCBS assisted a Growth Capital transaction with the existing management team at ERA, who help businesses in the media and entertainments sectors scale up their IT infrastructure to meet increasingly sophisticated editing and rendering requirements.

As part of this work, the Deal Team at EvolutionCBS, spent considerable time with the leadership at ERA, to identify their needs and to discern whether Growth Capital was a route to achieving their objectives. This meant a number of financial investors and organisations were identified and approached by the EvolutionCBS Deal Team, acting on behalf of ERA.

Ultimately, EvolutionCBS engaged with Rockpool Investments, a financial investor dedicated to creating opportunities for High-Net-Worth Individuals (HNWIs) to invest in private companies. Rockpool provides equity and loan financing of between £3m to £12m to profitable UK-based private companies and has invested over £550m since inception.

Steve Barry, Senior Client Director at EvolutionCBS, who led the transaction, commented:

“We are absolutely delighted for the management team at ERA – Growth Capital funding can be a source of unlocking significant future successes. Additionally, this transaction features an excellent business active within the technology-enabled Media and Entertainment industry, engaging with a financial investor committed to the longer-term success of this great business.”

Similarly, the Deal Team at EvolutionCBS worked with Phoebus Software (PSL), a market leading provider to the banking, lending and savings sectors, delivering innovative and seamless solutions for the origination and management of loans and savings accounts. EvolutionCBS ultimately went on to help PSL attract substantial financial investment to support the step change in their growth plans as the business aspired to accelerate its growth trajectory for the future.

Part of this work involved the shareholders considering their longer-term strategic plan to exit the Company, which meant supporting the existing management to promote and unite under their long-established MD as he stepped up into the role of CEO, and then introducing the leadership to NorthEdge Capital, a financial investment firm that supports MBOs, development capital and equity release transactions.

Steve Barry, Senior Client Director at EvolutionCBS, who also led this transaction, commented:

“EvolutionCBS had been supporting Phoebus since late 2015, assisting them in preparing for Robert and Peter’s retirement from the business. Accordingly, we were delighted to introduce the team at Northedge, who provided the funding necessary for the business to go on to achieve its future growth plans.”

In conclusion, company owners/shareholders addressing the question of “How can I build future value into the business?” would be wise to pay attention to their ‘financial hygiene’, essential for a healthy Balance Sheet, alongside continuing to drive turnover and profitability. Lastly, harnessing the acumen of an experienced M&A advisor will also do no harm and could ultimately help you access significant future growth.”

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To find out more about what’s involved in selling a business and how to begin your preparations, please join us for a free Business Owners Masterclass on 5th October aboard HMS Belfast in London.

As a long-established premium provider of business sale advisory services to UK businesses, EvolutionCBS offers business owners a complimentary and confidential discussion on how their specific objectives could be met and provides pragmatic, practical advice on how to begin preparing both themselves and their businesses for future sale or investment. 

EvolutionCBS works with owners of UK businesses in any sector, finding buyers from around the world through highly targeted research and supporting clients with dedicated Director-led teams, at every stage of their journey to a successful sale or investment. 

If you are an owner or shareholder of a business and would like a no-obligation consultation on the sale of all or part of your business, please email: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.

EvolutionCBS offers an online free business valuation report that draws on industry statistics to help business owners gain a deeper understanding of how their business is performing. This 29-page report will help bring deeper insight and uncover ways to improve.

How will the report help you?

1.) Worth – In many cases a business owner’s largest asset is their business. Without knowing the value of their business, it is impossible to know a business owner’s true net worth.

2.) Protection – Ensuring proper protection starts with understanding a business’s value. Most business owners do not know what their business’s full worth, which means that they may be undervaluing what they can provide for their loved ones. Proper protection and risk planning can help their families remain financially secure if something were to happen.

4.) Informed Decision Making – Helping you to make plans for the future of the business. This could include creating a succession plan, determining whether to sell or pass the business down to a future generation, or simply determining a growth strategy.

3.) Future Planning –A business often drives the decisions made around retirement, retirement income, estate, and/or trust planning. In many cases the business will be one of the main sources of retirement income so it’s essential to have a clear understanding of its value in different situations.

What values will the report give you?

1.) Equity Value – Includes Inventory/supplies, fixed assets and intangible assets, PLUS liquid financial assets LESS all liabilities. This value involves the full transfer of the legal entity including all account balances and current tax attributes. (The buyer is acquiring ALL of the assets and liabilities, on and off the balance sheet)

2.) Asset Sale Value – Includes ONLY inventory/supplies, fixed assets, and all tangible assets. Excludes all liquid financial assets and all liabilities. Buyer operates from newly formed legal entity. (The seller keeps the cash and receivables but delivers the business free and clear of all debt)

3.) Enterprise Value – Enterprise Value reflects the firm’s value as a functioning entity and it is helpful in that it facilitates the comparison of companies with varying levels of debt.

4.) Liquidation Value – Based on the assumption of insolvency and the immediate sale of all assets on the balance sheet coupled with the satisfaction of all debts. This figure does not include accounts receivable.

Free business valuation

When you’re planning to sell a business, one of the key assets you will be offering is your customer base. This is a major value driver for both seller and buyer and it is well worth spending time analysing your customer base in some detail so that you can fully promote its value and thereby raise offer prices.

Businesses that can demonstrate a good understanding of their available audience and their engagement with it will be much more likely to achieve a good valuation.

Assessing issues and mitigating risks in advance of purchase negotiations starting can make a big difference to the eventual price achieved. We recommend businesses start the process at least two years before they hope to sell.

Avoid client concentration to increase value

The most valuable customer base is one where no single client dominates. Ideally no client should represent more than 10% of total revenue. Better still, if you have a variety of customer types, across a variety of industry sectors, the value goes up. This level of diversity protects your business from any reduction in demand because of economic fluctuations within a particular sector.

Of course, any buyer will want to be sure that your customers will stay with the new business once a transaction is completed. It will be up to you to provide the factual information that they need to make this assessment and will be critical to the offer price

Analyse your customer base to reduce risk

It is a good idea to spend time looking at your customer base in the same way as a buyer. Typically, they would want to know:

• The impact on your business if you lost a major customer.
• Do you have customer contracts in place with your major customers? Contracted revenues are always preferable. Make sure that these contracts are transferable to new owners.
• Do you have exclusivity with any major clients and what are the terms of this arrangement?
• Which customers have preferential pricing that would be difficult for them to find elsewhere.
• What is the profitability of your major customers? Obviously the more profitable the greater the impact if you lose them.
• Do major customers purchase a range of products/services from you? If so there is a greater degree of dependency on you as a supplier.
• How many of your major customers do you personally hold the relationship with? If it’s a high percentage, this needs to be reduced by transferring that to other members of your team otherwise you are unlikely to be able to leave the business on sale.
• Do you measure customer satisfaction rates? The more you can demonstrate high levels of customer satisfaction, the more likely your customers are to stick with you.

Customer retention, particularly of larger customers, will be a major concern for a buyer and everything that you do in advance to allay that concern will benefit you.

Once you enter due diligence your buyer will want to dig more deeply into pipelines, contracts, feedback surveys, churn rates and recommendation rates. By analysing your customer information in advance, you will be well prepared to provide this level of detail. Ultimately it will also save you time and money during the due diligence process.

If you would like to find out more about what’s involved in selling a business, contact us on 0118 959 8224 or email info@evolutioncbs.co.uk.