What is my business worth?
what the market will pay for a business is often a complex and time-consuming
process and requires considerable business sales and valuation experience.
& Acquisitions qualified professionals have many years of experience
in determining business values. Our extensive knowledge of business sales consists
of our own proprietary information as well as extensive data accumulated from
research and monitoring of private and public business sale transactions.
market value of a business is influenced by internal as well as external factors
outside of the sellers control. Mergers & Acquisitions have devised
a comprehensive questionnaire and checklist which addresses the essential issues
impacting on business values.
Mergers & Acquisitions focus exclusively on business acquisitions and divestments
we are able to analyse prevailing market conditions and implement innovative marketing
and sale strategies that helps to deliver the best value for a business.
What is Due Diligence?
The concept of Due Diligence
is well developed in overseas jurisdictions and was originally designed as a defence
to an action for civil liability in the context of issuing a company prospectus.
The term has now gradually been introduced into everyday language and as
there is no definitive meaning of a due diligence investigation, it is essential
to define the objectives and procedures as well the effect of the outcome of the
due diligence investigation, prior to the start of the proceedings.
What is the situation regarding the employees when I sell a business?
protection of the interests and entitlements of the staff need to be handled with
care and in an organised manner. The seller will need to consider the obligations
in regards to the termination of employment of the employees who do not transfer
to the employment of the buyer. In regards to leave entitlements, three main types
need to be considered: Annual leave, Long service leave and Sick leave.
issues are complex and subject to a range of differing state and industrial awards.
Mergers & Acquisitions are able to assist with advice relevant to these issues
in conjunction with the legal representatives for each party.
Will I pay Capital Gains Tax upon the sale of my business?
gains tax exemptions and concessions relating to the sale of a business need to
be considered in light of the individual circumstances of the seller prior to
accepting an offer on the business. Mergers & Acquisitions can work closely
with your specialist tax adviser on this issue.
Does the sale of a business attract GST?
In most cases and subject to certain conditions, the sale of a business as a going concern will be GST-free. Where freehold property meets going concern rules it may also be GST-free.
Is a Trade Restraint enforceable?
To be enforceable,
a Trade Restraint generally restricts the seller from a similar endeavour to the
type being sold, within a reasonable geographic area from where the customers
came from, and be limited to a reasonable period of time. There is also the requirement
of adequate consideration.
The agreement may specify restrictions on certain
confidential secrets, business processes, customer lists, etc that are being transferred
with the business.
Restraint agreement that was entered into with a previous owner of the business
may be capable of being transferred to the incoming purchaser. Importantly, the
restrained persons should be the directors or key employees of the vendor company,
as any restrictions preventing only the vendor company from competing would be
an empty promise if the Key operators were not likewise restrained.
Is Recasting of the financial statements an acceptable practice?
Recasting or adjusting
the financial statements, when done in a professional and competent manner, is
an acceptable practice. However, unsubstantiated or careless adjustments can lead
to a feeling of distrust which in turn can lead to offers that reflect the purchasers
concerns regarding the validity of earnings.
As an example, depreciation
adjustments can vary to include free cash flow considerations, useful life expectancy
or replacement cost considerations. Each situation needs to be addressed in relation
to its individual circumstances and merits.
Mergers & Acquisitions assists
in the preparation of a credible presentation of the business with recasting elements
drafted to the accurate industry criteria of likely acquisition candidates.
How is the value of Stock defined?
The method of calculating
the price or value of the stock-in-trade is best defined within the terms of the
heads of agreement or contract to purchase a business.
Obsolete stock, slow
moving stock and products nearing their use-by or saleable date require special
attention. An agreement should be reached defining the meaning and allocation
of an appropriate discount or arrangement for stock falling into these categories.
process can become complicated when dealing with businesses that have a component
of raw materials, semi-finished goods, spare parts or work in progress. Similarly,
goods sold on lay-by or instalment sale require an arrangement between the parties
and stock held by the vendor on consignment cannot be sold to the purchaser. Mergers
& Acquisitions have had considerable experience in negotiating these delicate