Rainmakers Seminar – just the start
A packed out lunch time seminar on protecting value and building value gave a foretaste of the high level, high quality content TheBusinessDesk.com is delivering in readiness for the Rainmakers conference to be held on 20 March 2024 at The Point, Emirates Old Trafford.
Held at the offices of sponsoring law firm Squire Patton Boggs and co-sponsored by Shawbrook Bank, the event featured insights and reflections from two of the individual winners from the 2023 Rainmaker Awards, Andrew Feeke, partner with MHA Moore and Smalley, and Nicola Merritt, chief executive of Cortus Advisory, and from SPB corporate partner Giles Chesher.
All gave good demonstrations of the ‘bedside manner’ they have towards clients, many of whom are business owners engaged in a once in a lifetime transaction.
They shared the importance of good data, approaching a process for the right reasons and making sure commercial contracts were in place.
Andrew Feeke, who has completed a number of deals in the software world, said: “Where does the IP sit? We’d have questions like that, that you need to be resolved that would drive to the very core of value.”
Nicola Merritt said there are a whole range of sector specific issues to consider, some businesses did well during COVID, but then sales dropped off, affecting valuations. “I think you always have to look wider. What’s happened in that sector? what’s happened in the industry? is there regulation coming down the track?”
Giles Chesher said he sees many owner managed businesses where the founder is looking to either take a step back entirely or partially, but hasn’t got the next generation of management lined up ready to go. “That can be a massive risk. Which buyer is going to hand over a bunch of cash to a team that disappear off into the sunset, and they’ve got no one picking it up.”
All three also gave great insights into the importance of culture, values and shared their own non-negotiable behaviours.
That was a terrific warm up for an insightful second panel featuring Rebecca Green, the finance director of Compass Finance and Steve Malone the chief executive of Inprova. Both have made acquisitions, and both have been supported by challenger bank Shawbrook, who’s corporate lending director Daniel Martin was on hand to comment from the perspective of a sophisticated lender.
“We need the quality of information to be able to monitor that business, so we can see the growth story but also foresee any bumps in the road, we need to spot it early,” he said. “There are a lot more levers to pull three, six, 12 months out than there are with just three weeks out. So the quality of the information is really important.”
Steve Malone said he takes a blueprint for any business that his business may want to be involved with. “So we will look for, in our instance, large recurring spend areas, we look for areas where there’s already a high level of regulation or legal compliance that’s required where it needs a lot of technical input.”
In Rebecca Green’s experience, there isn’t a one-size fits all model when it comes to valuing and acquiring a business, but any decision does have to meet a basic integrity test.
“We have seen some challenges in bringing in acquisitions. Sellers might hit a really low point and don’t really think it’s the right time to sell. But for us, it’s really key for our growth model which is ambitious. We have changed the way that we value things, we’ll look at income streams in the last 12 months, rather than just what’s happening today, and then projecting them forward. We protect our business model and make sure the agreements that we have with our individual sellers, we won’t give away all our upside, but we’ll come to a shared agreements.”