Selling a business can be an intense and demanding exercise, which doesn’t leave a lot of room for business owners to think about life post-sale. Yet having a clear idea of what you want to achieve from a sale, as well as a clear plan for what comes next, might be just what’s needed to help keep you motivated during the final and hugely demanding Due Diligence phase of the selling process.

Part of the challenge is that undertaking a sale demands 100% commitment and focus right from the outset. This means thorough preparation, as well as recognising the value proposition within the company, its potential ‘enterprise value’, and addressing a select group of acquirers in the most compelling way.

What’s usually not encouraged is thinking too hard about the post-sale phase, which could be a serious mistake for a number of reasons, especially as most deals nowadays will include an element of post-completion involvement on the part of the existing shareholders.

To evidence this, most of the deals completed this year by EvolutionCBS have had deal structures demanding some post-sale commitments from the sellers. Post-sale commitments come in many forms, for instance, it could be a period of months actively assisting the acquirers to ensure a smooth transition of ownership.

The duration of post-sale involvement can also vary tremendously, so during negotiations, it’s best for sellers to spell out exactly what they are willing to commit to post-sale, and to remain open-minded to any requirements the acquirers may have. That said, it is possible for a seller to benefit tremendously from post-sale involvement.

Recently, in addition to receiving significant cash on completion EvolutionCBS clients have also benefitted from combinations of shares in the newly formed acquiring company and highly beneficial interest bearing deferred payments as part of their overall consideration. This resulted in our clients enjoying an ongoing income from the interest ‘coupon’ on the deferred payments and the potential of a further – and equally substantial – cash lump sum when those shares were ultimately sold. By agreeing to a post-sale involvement underpinned by deferred consideration and/or shareholding in a Newco, our client positioned themselves for an additional future upside.

Finally, beyond any transitionary obligations to an acquirer, it’s always worth giving thought to what you actually want to do with the rest of your life. EvolutionCBS client Peter Saunders, after selling his business to a US-based manufacturer and a market leader in modular cleanroom production, told us in a video testimonial about his future plans:

“I’m looking forward to spending much more time with my wife. I’ve been married for 40 years and I’ve never had any real time off, plus my wife’s lived it with me along with friends and family. I’ve got three holidays booked for the next year and property development has always been of interest. Apart from that I think I fancy becoming a magistrate, as I’m certainly young enough!” ■

Considering a sale of your business? Our free Business Owners Masterclass on 12th October will address these and other complexities of selling a business, including how companies are valued, as well as other fundamentals, such as earn-outs, handling negotiations, and due diligence.

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: info@evolutioncbs.co.uk or contact us on Tel: 0118 959 8224.