Is Your Business Attractive to an Overseas Buyer?

April 6, 2021

Many UK businesses that are sold these days are bought by overseas buyers. Typically, this is not because of an express desire by sellers to sell to an overseas buyer, but rather a result of the overseas buyer community simply ‘paying the best price’. The strategic premium achieved from an overseas buyer can be significant and therefore you should do all you can to ensure that such buyers are included in the ‘mix’ when the time does arise.

 

To maximise your chances of selling to an overseas buyer, you should focus, to begin with, on the following 4 things:

 

  1. Size

Overseas buyers will typically only focus on UK businesses once you reach a certain size threshold.  Less than £3m in turnover and it is unlikely that the interest that you or your adviser will generate will be sufficiently attractive.

 

  1. Management Team.

Ensuring you have a strong management team that is independent, where possible, of you is key.  Unlike a buyer from the UK, an overseas buyer will often require your UK team to be of sufficient quality to manage, without their input, what will represent their ‘domestic business’.  Absent this, you may find overseas buyers walk away because there is no management solution.

 

  1. Appetite for your product service overseas.

Being able to demonstrate an appetite for your product or service in a territory from where buyers may herald (whether that be USA, Europe, Asia, or the Middle East) will significantly improve your attractiveness to an overseas. Buyers can be encouraged to pay for the ‘sale synergies’ that can be seem (ways in which they can sell your products or services to their existing customer base).

 

  1. Overseas PR.

The first thing a buyer will do when they hear about your business is ‘Google’ you. If you are ‘picked up’ in an overseas territory as having been cited in the press or through trade show press, it will provide an overseas buyer with the comfort that you may be a business of substance.

By following these initial steps, you and your business will be far better positioned to approach, and obtain interest from, the overseas buyer community. The key thereafter will be identifying these potential buyers, particularly if you are unfamiliar with the territories in which they operate. If you are so fortunate in finding them, however, you may discover that the price they pay is well more than that which would be mooted your domestic competitors or any others.

 

At Bluebox, we pride ourselves on our bespoke research capabilities. Not only do we have an excellent track record of identifying overseas buyers, but we have received outstanding feedback at the level of responses we receive from them too.

To find out more about how we can help you, speak to us confidentially on 0203 924 51510 or email us at info@blueboxcfg.com.

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