Raising £6 million to buy a business?
Discussion
A group of us are considering buying a niche market business. Valuation is spot on around £6m.
Business has strong net profit and good potential growth.
What modes of finance raising could be undertaken?
I'm thinking some form of leveraged buyout but have no experience in undertaking this.
Thoughts on a postcard or a motoring forum thanks
Business has strong net profit and good potential growth.
What modes of finance raising could be undertaken?
I'm thinking some form of leveraged buyout but have no experience in undertaking this.
Thoughts on a postcard or a motoring forum thanks
Thanks for the responses guys.
I have considered Private Equity however as the price is rather low I didn't think it would be of interest to them.
But perhaps it may be as certainly the growth factor is exciting.
I have some experience in the P/E field due to being part of the management team that sold a similar company, albeit larger two years ago to KKR for $1.15B. That involved Candover/Arle Group and Electra. Both mid-size PE's.
Anyhow I have two investors lined up, one a supplier to the industry based out of HK and one FFF (friend, fool, family etc..) plus my own cash.
At this point though it's very early days. No NDA has been signed with potential acquisition and thus no certified accounts have been seen, hopefully next month.
Oh, I'm located in Australia but the business is located in Germany (this is not an issue as the growth areas are North America and Canada anyhow).
I have considered Private Equity however as the price is rather low I didn't think it would be of interest to them.
But perhaps it may be as certainly the growth factor is exciting.
I have some experience in the P/E field due to being part of the management team that sold a similar company, albeit larger two years ago to KKR for $1.15B. That involved Candover/Arle Group and Electra. Both mid-size PE's.
Anyhow I have two investors lined up, one a supplier to the industry based out of HK and one FFF (friend, fool, family etc..) plus my own cash.
At this point though it's very early days. No NDA has been signed with potential acquisition and thus no certified accounts have been seen, hopefully next month.
Oh, I'm located in Australia but the business is located in Germany (this is not an issue as the growth areas are North America and Canada anyhow).
It's a strong growth niche industry with high barriers of entry. Some good IP and excellent brand name, under-developed and playing in slightly wrong sector (easy fixed).
Good Engineering team, Good Sales team but requires CEO (a couple of potentials I'm meeting in December too).
In this industry there's been three larger but similar companies sold, all have achieved circa 11 X EBIDA multiples.
I personally won't have access to my next lump of cash for 12 months but want to structure the deal throughout 2015 and so it's worth kicking off the dance now.
For investment I'm going to go this route:
Personal Investors - I know a couple that'll possibly be interested.
Commercial Banks (or commercial divisions of high st banks) - Lower rates but higher requirements for financing
P/E - Less barriers to obtaining financing but demand higher reward (up to 35%pa when the dust settles or 3 x investment over 5-6 years), also can assist in the exit process that I'd intend to do in around 5 years.
I should point out that 6 million also includes a 24 months expansion plan, actual purchase price is much lower.
Good Engineering team, Good Sales team but requires CEO (a couple of potentials I'm meeting in December too).
In this industry there's been three larger but similar companies sold, all have achieved circa 11 X EBIDA multiples.
I personally won't have access to my next lump of cash for 12 months but want to structure the deal throughout 2015 and so it's worth kicking off the dance now.
For investment I'm going to go this route:
Personal Investors - I know a couple that'll possibly be interested.
Commercial Banks (or commercial divisions of high st banks) - Lower rates but higher requirements for financing
P/E - Less barriers to obtaining financing but demand higher reward (up to 35%pa when the dust settles or 3 x investment over 5-6 years), also can assist in the exit process that I'd intend to do in around 5 years.
I should point out that 6 million also includes a 24 months expansion plan, actual purchase price is much lower.
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