Sellers

If you wake up today and you decide you want to sell your business tomorrow, sadly, HTM Capital is not the best partner for you. We have a tremendous bias to engage with business sellers as early as possible so as to fully mould expectations and adequately prepare the business for rigorous scrutiny by buyers. From our experience, we prefer engaging with business sellers for a minimum period of 3 months. This will however vary based on:

  • Time availed by senior management to the process
  • Availability of well kept book of accounts
  • Up to date business plan or clearly documented strategy deed
  • The company's in-house market intelligence data - broad industry data and statistics

Another key consideration is the structure of the business. Many closely held companies are managed to minimize taxable income as opposed to maximizing returns. Since accurate estimation of business value depends upon the subject business financial performance, the company's historic financial statements, such as its Income Statements and Balance Sheets, would require certain adjustments. The objective of these adjustments is to reconstruct the historic financial statements in order to reveal the true economic potential and earning power of the subject business. Common adjustments include;

  • Accrual accounting from cash accounting
  • Removing all non-business expenses - objective is to treat shareholder interaction with business as such and not as normal operating business activities
  • Reclassifying Promoter withdrawals as salary
  • Inventory and receivables adjustments to cater for any impairments
  • Converting shareholder loans to equity or commercial terms

Lastly, it makes absolute sense to engage with you as early as possible because, correctly timing the sale is critical. You want to sell your business when; profitability is rising, balance sheet is in good shape, market outlook for your business and industry is positive and multiples of comparable companies are in your favour.

While our primary focus remains working with you to maximize the value of your business, on completion of the valuation process we are at hand to help you identify potential investors at no added cost. However, in the event you want our participation in the negotiation process an additional agreement will be applicable.

If you have received unsolicited offers from multiple buyers, we guide you in determining the best offer – focus being on securing the best price, but most importantly the right partner.

Beyond valuation – remaining a true partner

Once the business valuation and capital raising process is complete, we offer post-investment support services. Our post-investment service is tailored to support the business’ continuous need for timely internal and external information. Timely access to information ensures the business correctly monitors trends in key performance indicators hence guiding better decision making in light of drift in internal, industry and economy wide factors.

So why is this important? Though in most cases the business owner retains a controlling stake in the business, post-investment, the decision making process becomes less “gut based” and more “fact based” - investors require strategic decisions to be based on more precise, defensible information. As the operator of the business, you will also be required to provide monthly or quarterly business update reports that go beyond just normal book of accounts.

Ultimately, raising capital from investors is just one part of realizing the true value of your business; consistency, which can only be sustained by having timely access to well structured relevant information completes the puzzle.

“..... every story has its demands”