Buying out a partner
Discussion
I want to keep the details brief for personal reasons but for the sake of an accurate reply, let`s say, 2 parties A & B, in a newly formed business project, with a guaranteed income of say £4mil over a 20yr+ term and an asset of est £4mil by the end of the term.
At the end of the term the asset will still be there to sell or hold, but the contract for income would have run it's course and expired.
What would you suggest being a fair amount of money to buy one of the partners out of the project in the early stages? Bear in mind, it`s the party member that has brought everything to the table, except the asset, who has been made an offer to walk away.
It`s not a case of it can`t be replicated elsewhere by party A without party B and I`m not after that advice. It`s just a simple buy out offer based on the fact that Party B wants to reap the income alone in the future as 20yrs + is a long time to be together with a business partner.
Nothing underhanded and no fall-outs, just a fair amount for one to keep the project and the other to walk away.
How would you calculate a fair amount based on the above info? Is there a business formula when valuing a company like this?
At the end of the term the asset will still be there to sell or hold, but the contract for income would have run it's course and expired.
What would you suggest being a fair amount of money to buy one of the partners out of the project in the early stages? Bear in mind, it`s the party member that has brought everything to the table, except the asset, who has been made an offer to walk away.
It`s not a case of it can`t be replicated elsewhere by party A without party B and I`m not after that advice. It`s just a simple buy out offer based on the fact that Party B wants to reap the income alone in the future as 20yrs + is a long time to be together with a business partner.
Nothing underhanded and no fall-outs, just a fair amount for one to keep the project and the other to walk away.
How would you calculate a fair amount based on the above info? Is there a business formula when valuing a company like this?
For clarity, I am the party that has been offered to be bought out and was enquiring how to value the future investment. After the initial post, I`ve spoken to my accountant, and he is assessing it for me.
Due to this being a public forum, I apologise for not going into too much detail. This isn`t even my usual PH profile.
I bring to the table something that Party B cannot replicate themselves. In brief, B owns a plot of land, and we have agreed to build it out and lease it via the local council. As it`s public funding it`s not for anyone to set up and replicate.
I wouldn`t mind being in it for the long term however, as stated above, I could use the money for other development projects. Especially as I`ve been asked to supply 100+ self-contained units for my client over the next few years.
I can find the projects, the problem I`ll have is finding all the private funding for all the equity required to get them built or converted.
Due to this being a public forum, I apologise for not going into too much detail. This isn`t even my usual PH profile.
I bring to the table something that Party B cannot replicate themselves. In brief, B owns a plot of land, and we have agreed to build it out and lease it via the local council. As it`s public funding it`s not for anyone to set up and replicate.
I wouldn`t mind being in it for the long term however, as stated above, I could use the money for other development projects. Especially as I`ve been asked to supply 100+ self-contained units for my client over the next few years.
I can find the projects, the problem I`ll have is finding all the private funding for all the equity required to get them built or converted.
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