"We want to buy your business" letters
Discussion
We're now getting handfuls of letters every week from people wanting to buy our business. Our business hasn't fundamentally changed in the last few years. Historically, we'd get maybe one or two letters every sixth months but now I have piles of them.
We're not looking to sell but my natural scepticism takes over and I have to start investigating. Some are brokers, some are family office types and some seem to be operating out of their bedroom.
I'm aware of facebook/tikt
tters boasting how they acquired business x with none of their own money going in and other fantasties so I wonder if that is partly fuelling the correspondence. Or, BPR changes fuelling disposals?
We're not looking to sell but my natural scepticism takes over and I have to start investigating. Some are brokers, some are family office types and some seem to be operating out of their bedroom.
I'm aware of facebook/tikt
tters boasting how they acquired business x with none of their own money going in and other fantasties so I wonder if that is partly fuelling the correspondence. Or, BPR changes fuelling disposals?Simpo Two said:
Maybe you got onto a mailing list and they all just bought the same list.
What would they do if they bought all those businesses anyway? They can't run them all... do they offer £50 and then flog everything at auction?
I hadn't considered mailing lists but figured it was more driven by people crawling Companies House and or Plimsoll reports (whatever they are). What would they do if they bought all those businesses anyway? They can't run them all... do they offer £50 and then flog everything at auction?
I get them all the time, mostly from middle-men
I just tell them to move on, we'll just liquate the company and rent the factory out when we're ready to retire as we're too niche for anyone sensible to consider buying us. I assume they think we're stupid enought to fall for an offer which is based on a future figure that will never happen whilst they asset strip us.
I just tell them to move on, we'll just liquate the company and rent the factory out when we're ready to retire as we're too niche for anyone sensible to consider buying us. I assume they think we're stupid enought to fall for an offer which is based on a future figure that will never happen whilst they asset strip us.
A few things at play here...
Brokers and M&A companies increasing just look at Companies House data to find targets and scatter gun hoping to sway and catch an owner at the right time.
The up tick is probably due to so much capital around with no where to go, there is a desperation to find suitable businesses in which to invest. Steer clear of brokers, they are the plague. But it might be worth sounding out some investment companies and family offices. If you don't want to sell you are in a great negotiating position so could get a great price.
Brokers and M&A companies increasing just look at Companies House data to find targets and scatter gun hoping to sway and catch an owner at the right time.
The up tick is probably due to so much capital around with no where to go, there is a desperation to find suitable businesses in which to invest. Steer clear of brokers, they are the plague. But it might be worth sounding out some investment companies and family offices. If you don't want to sell you are in a great negotiating position so could get a great price.
AI is making targeting easier and easier, more capital out there, harder to find good deals etc - all add to an increase.
If you are thinking about an exit use an adviser (proper M&A person, not a broker) - will pay for themselves several times over at the least.
If you aren’t, just save the letters for another day, and as other have said ignore those that look irrelevant. Very easy to waste a lot of time and money engaging with prospective buyers. Their outbound letters are typically very generic and over promise.
This is my world so feel free to DM me if you want some informal tips.
If you are thinking about an exit use an adviser (proper M&A person, not a broker) - will pay for themselves several times over at the least.
If you aren’t, just save the letters for another day, and as other have said ignore those that look irrelevant. Very easy to waste a lot of time and money engaging with prospective buyers. Their outbound letters are typically very generic and over promise.
This is my world so feel free to DM me if you want some informal tips.
oddball1313 said:
I get them all the time, mostly from middle-men
I just tell them to move on, we'll just liquate the company and rent the factory out when we're ready to retire as we're too niche for anyone sensible to consider buying us. I assume they think we're stupid enought to fall for an offer which is based on a future figure that will never happen whilst they asset strip us.
Cynical and far from the reality. I worked in this sector for 8 years, for the biggest player at the time and I've seen many niche businesses sell. But if you want to bin the value you built up, then that's your choiceI just tell them to move on, we'll just liquate the company and rent the factory out when we're ready to retire as we're too niche for anyone sensible to consider buying us. I assume they think we're stupid enought to fall for an offer which is based on a future figure that will never happen whilst they asset strip us.
Some good advice already. My business is acquisitive, so we do send out letters via advisors to find targets.
My 2p. There are a few angles to consider if you get this sort of unsolicited approach and want to consider the option.
It could be a straight scam. I’ve been targeted by people claiming to represent a family office (or similar) wanting to buy my business. Scammy scam time. Fairly easy to spot.
It could be a commission scam. One particular broker that has a name associated with a posh part of London does this, not exclusively. The MO is to get a business interested in a valuation (for their long list of buyers obvs). The valuation is more than the business expects so they sign up, the price is not achievable so the business never sells. The other bit to watch out for is a drag along clause that gives them commission if you sell elsewhere.
It could be legit. In which case the first thing to do is ask some questions. Where is the funding from? How do they value the business (what metric and x multiple)? Do they have a track record in your sector? What type of deal do they do (cash day 1, deferred etc).
You can usually separate the wheat from the chaff quite quickly and know if your time is worth spending moving it forward. Any non answers to the key questions above are a red flag for me.
My 2p. There are a few angles to consider if you get this sort of unsolicited approach and want to consider the option.
It could be a straight scam. I’ve been targeted by people claiming to represent a family office (or similar) wanting to buy my business. Scammy scam time. Fairly easy to spot.
It could be a commission scam. One particular broker that has a name associated with a posh part of London does this, not exclusively. The MO is to get a business interested in a valuation (for their long list of buyers obvs). The valuation is more than the business expects so they sign up, the price is not achievable so the business never sells. The other bit to watch out for is a drag along clause that gives them commission if you sell elsewhere.
It could be legit. In which case the first thing to do is ask some questions. Where is the funding from? How do they value the business (what metric and x multiple)? Do they have a track record in your sector? What type of deal do they do (cash day 1, deferred etc).
You can usually separate the wheat from the chaff quite quickly and know if your time is worth spending moving it forward. Any non answers to the key questions above are a red flag for me.
Frimley111R said:
Cynical and far from the reality. I worked in this sector for 8 years, for the biggest player at the time and I've seen many niche businesses sell. But if you want to bin the value you built up, then that's your choice
99% of people don t understand what the products we sell do, never mind know what they re worth. Then you have the national & international contacts, specialist engineers, knowledge of transport, exporting of dual use products. Laughable that some numpty thinks he can just jump in and do the same job as a 4 man team with over 100 years experience in the industry between them. Edited by oddball1313 on Wednesday 15th July 07:09
We get them every week now or emails. They’re even addressed to our Property co.
They must send thousands out and have a huge number of very small businesses for sale on their websites, many at the low valuations end.
If they’re getting a retainer, it’s a volume game and presumably the mail shots work and are cheap to send.
You’re not going to use them to sell a £20m business, but it may give owners exit options other than just closing the door.
They must send thousands out and have a huge number of very small businesses for sale on their websites, many at the low valuations end.
If they’re getting a retainer, it’s a volume game and presumably the mail shots work and are cheap to send.
You’re not going to use them to sell a £20m business, but it may give owners exit options other than just closing the door.
Isn't it just the way in the UK now?
So many small/medium businesses are bought out by multi nationals once the donkey work is done.
Privatisation of utilities and public transport seems to be the catalyst in my eyes.
My son does work at Excel, now the Abu Dhabi something or other, apparently it doesn't matter how much you need to shift, or whether the truck bringing it is equipped with a fork truck to unload it, you have to use the one they supply with a driver, for 3k.
Asset stripping seems rife, look at Thames water, it doesn't seem to have worked.
Steel and the railway coming back into nationalisation, we seem to have been getting wrong for a long time and paying the price now.
So many small/medium businesses are bought out by multi nationals once the donkey work is done.
Privatisation of utilities and public transport seems to be the catalyst in my eyes.
My son does work at Excel, now the Abu Dhabi something or other, apparently it doesn't matter how much you need to shift, or whether the truck bringing it is equipped with a fork truck to unload it, you have to use the one they supply with a driver, for 3k.
Asset stripping seems rife, look at Thames water, it doesn't seem to have worked.
Steel and the railway coming back into nationalisation, we seem to have been getting wrong for a long time and paying the price now.
I’ve seen more of these letters recently too. I assume that brokers are scraping Companies House for directors aged over 60, as that seemed to be when it stepped up.
Most of them are fairly unsophisticated brokers touting for business, but I do keep some of the better looking ones as the timing is starting to feel right, so if they are using the age profile it’s probably not a bad plan!
Most of them are fairly unsophisticated brokers touting for business, but I do keep some of the better looking ones as the timing is starting to feel right, so if they are using the age profile it’s probably not a bad plan!
Gassing Station | Business | Top of Page | What's New | My Stuff