Should you remain involved in the business post-sale?

‘Received wisdom’ in the world of mergers and acquisitions suggests that business owners that want to sell should seek a full exit from their business, but what about the shareholder that chooses to remain actively involved in the business post-sale?

Long-term involvement post-sale can be very appealing on a number of fronts and there can be various motivating factors for choosing to ‘remain’, including a fresh sense of excitement over what the future could hold under new ownership

Here are a few other benefits of choosing to stay in the business post-sale:


Fresh financial investment

One immediate benefit post-sale is the injection of significant fresh capital and resources into the business. Suddenly the ability to invest in growth, upgrade plant and equipment, deliver new incentives to staff, and pursue long-held strategic goals becomes a distinct reality. If a shareholder does remain, they are in the enviable position of having the backing of new investors with the capital/resources to help the business achieve even greater levels of success.

This was precisely the outcome for the shareholders of ERA, a virtual workstations, storage-as-a-service, workflow applications, connectivity and cloud archiving solutions company, when it received a significant growth capital investment from Private Equity firm Rockpool Investments, in a transaction managed by EvolutionCBS. Both the incoming team and the existing shareholders were committed to utilising the significant capital investment provided by Private Equity to accelerate ERA’s growth trajectory.

Commenting on the deal in a recent EvolutionCBS podcast, Sean Baker, Commercial Director, ERA, states:

“After 20 years of running the business, we knew we needed to seek a serious investor to achieve the next step in the growth of the business. We are delighted that Rockpool as investors were keen to have us remain involved and that they introduced a new Chairman and Finance Director to the business, both with deep sector expertise.”


Freedom to pursue your commercial passions

Let’s face it, running a company is a 24/7 affair even with a strong management team in place, with little to no let-up for the existing shareholders. A sale can provide a release from the day-to-day leadership responsibilities and with that pressure off, a former owner can choose exactly what commercial role they would like to pursue in the business.

This certainly was the case for the shareholders of Pulse Power and Measurement Limited, a developer and manufacturer of high-end electronics within the Defence and Communications sector, that was acquired by BAE Systems, in a transaction managed by EvolutionCBS.

Martin Ryan, Managing Director, PPM comments: “We are excited about joining BAE Systems and bringing together our complementary capabilities, which will give our innovative team of specialists and engineers access to world-class expertise and ensure our successful business continues to grow.”

One of the former PPM shareholders remains active in the business, playing a significant role in current projects, a role they feel passionate about.


Personal Wealth

It’s worth considering that exiting shareholders who choose to stay on with the new acquirer can significantly increase their wealth beyond the initial sale proceeds. In one example, a former EvolutionCBS client chose to remain, taking shares in a ‘newco’ after sale, and went on to benefit from a new salary, dividends, benefits and a significant uplift in the valuation of the ‘newco’ shares when it came to an eventual secondary exit.

As far as personal wealth is concerned, this secondary exit can place owners into a whole new wealth bracket, way beyond the initial sale proceeds.


Intellectual/personal challenge

One unquantifiable gain of remaining in the business post-sale can be the opportunity to work on specific projects with the acquirer, which you might find personally quite exciting. Occasionally a company owner is keen to sell a majority of the company, to be freed up to pursue other more meaningful commercial projects within the industry as a whole.

To further illustrate this point, with EvolutionCBS’ most recent and highly successful client completion, one of the key objectives sitting behind the founding shareholder’s clearly expressed motivation to find an alternative ‘home’ for both his business – and the highly talented team with whom he’d successfully created such an amazingly valuable asset – was also to find an environment within which he could also personally continue to be professionally and intellectually stimulated in what will doubtless become the next stage in his professional career.

The opportunity to work with new owners, whether a Private Equity firm, larger corporation or multinational can present attractive future opportunities. In another example, both shareholders took up roles on the board of a global corporation and this allowed for international travel and networking in North America, while at the same time being released from the day-to-day pressures of managing a UK business.


Key Staff Relationships

For most company owners the knowledge that key staff members will be treated well post-sale is paramount. There may be one or two employee-directors or managers that have been part of your business ‘family’ for quite some time and accordingly, you want them to achieve greater success under the new ownership.

By remaining in situ, there can be an opportunity to help shape the future careers of those one or two key members of staff, who in turn will help to pioneer new initiatives and guide the organisation forward under the new ownership.

Ultimately, any decision to stay on versus an exit should not be taken lightly, as the final choice will impact how any deal is structured, and importantly for the remaining shareholder, how they are remunerated as they assume a new role in the ‘newco’. ■


If you are considering a business sale in the next few years, you will find all the advice you need at our next Masterclass exclusively for owners of private UK businesses, taking place on 16th March at Mercedes-Benz World, Surrey.




About Us

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 provide pragmatic, practical advice on how to begin preparing both themselves and their businesses for a future sale.

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.

If you are an owner or shareholder of a business and would like a no obligation consultation on the sale of your business, please email: or contact us on Tel: 0118 959 8224.

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