Sell your Business Series – Different Types of Exit Routes

March 23, 2021

Welcome to the third blog in our “Selling your business” series. This blog explores the different types of exit routes there are available to you and your business.

When it comes to selling your business, there are several exit routes you can take. Below is a summary of some of the more common types of transactions you may wish to consider.

 

Trade Sale

If your business represents a good strategic fit with a buyer’s existing operations, a trade sale could enable you to fully exit from your business. It is also often the case that buyers are willing to pay a premium for synergies they can unlock through the acquisition.

 

Management Buyout (MBO)

An MBO enables the existing management team to purchase the business from the shareholders, who will then drive the business forward. More than often, the management team looking to complete the buyout will need external investment to finance the deal, which is usually obtained through private equity funding or debt providers.

 

Partial Sale & Growth Investment

Selling a partial stake in your business can allow you to de-risk and realise some value today, while remaining involved and in control of day-to-day operations. Sometimes these deals also involve growth investment. It is important to note that any investor will be seeking a return on their investment, so will want to ensure that any cash sums received by you today are not significant enough to not distract you from achieving future growth and an ultimate exit down the line.

 

Initial Public Offering (IPO)

An IPO is the process of realizing value from listing the shares in your business on the stock market. This is a costly process; however, it can be hugely rewarding for some businesses.

The best exit route for you and your business will ultimately depend on the objectives of you and your shareholders (as explored on our first blog in this series). These will also help to shape to the types of buyers you speak with, of which certain exit routes will and won’t apply to.

 

If you are thinking about selling your business and would like a call to discuss how Bluebox can help, please call us on 0203 924 5150, or email us at info@blueboxcfg.com

Our next blog will explore the differences between a sale of shares and a sale of assets. Stay tuned!

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