Is the clock ticking for business sales?

Posted: 20/06/2016

In its latest white paper, BCMS, a specialist lead advisor to shareholders of private companies, looks at the potential impact of the retiring baby boomer generation on mergers and acquisition activity and examines whether today’s seller’s market will soon be changing to a buyer’s market.

Produced in association with law firm Penningtons Manches, 'Is the clock ticking for business sales?' analyses the claim that a far greater number of businesses will come to the market over the next decade as the baby boomer generation reaches retirement.

In the UK, for example, almost two thirds (63%) of small business owners are over 50. Of those over 60, two thirds (64%) have no clear succession plan. Many of the natural successors and potential buyers of private companies are members of Generation X - those born between 1965 and 1985 - few of whom have the equity or necessary financial resources to secure commercial loans.

The key findings of the white paper reveal the following:

• Ongoing strong demand for growing, specialist businesses from multiple acquirer types
• Clear evidence that many older business owners are postponing seeking a sale
• Relatively few SME businesses owners with a clear exit strategy in place
• The next generation of business owners may not have adequate access to funding
• Expected global increase in the number of businesses offered for sale in coming years
• Effective preparation gives business owners a clear advantage when seeking sale.

Commenting on the findings of the white paper, Simon Bickerdike, Penningtons Manches corporate partner who specialises in advising owners on how to sell their companies, said: “There is never a perfect time to sell your business as many external market factors are beyond control but the rule of supply and demand is immutable. As the average age of a baby boomer is now 60, this could result a potential glut of businesses for sale in the SME market over the next decade and the best prepared will have the pick of the opportunities.”

Steve Anstey of BCMS UK commented: “Those motivated by retirement are probably less concerned about the right market conditions to sell and more about exciting at a time that suits their lifestyle planning. A related factor is whether their business is worth whatever is needed to afford the desired post-sale lifestyle.”

To share the insights of the 'Is the clock ticking for business sales?' white paper, BCMS and Penningtons Manches are hosting an expert panel event on Thursday 7 July 2016 at the Penningtons Manches London office. This is designed to give business owners the information they need to plan their next steps.

For further information about the event please email seminars@bcms.co.uk.

Click whitepaper to download a copy of 'Is the clock ticking for business sales?'.

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