FAMILY VALUES MAKEBUSINESSES ATTRACTIVE

PROSPECTS

M&A NEWS FROM BCMS CORPORATE AUTUMN 2009M&A NEWS FROM BCMS CORPORATE AUTUMN 2009

INSIDE: FREE SERVICES DEAL COMPLETIONS DEAL STATISTICS US DEALS FAMILY BUSINESS FEATUREA SERIAL ENTREPENEUR’S VIEW LIFE AFTER A BUSINESS SALE YOUR QUESTIONS PARTNERING TERMINOLOGYINTERNATIONAL NEWS PHILANTHROPY SUCCESS GALLERY

i D E A LA c h i e v i n g y o u r i d e a l e x i t

WHY ARE FAMILYRUN BUSINESSESMORE DESIRABLETHAN EVER ? PAGE 8

CONFIDENTIAL BUSINESSEVALUATION MEETINGS

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You will be able to discuss, with one of our Business Managers, your current business operations andpersonal plans for exiting the business. In addition you will be able to find out more about our

methods for successfully selling businesses and, if you visit us at our offices, view the considerableresources we have in place to ensure that the maximum possible sale prices are achieved.

As a guide, business evaluation meetings typically last for around 90 minutes, however the length ofthe meeting is primarily dictated by the time you feel you need.

The majority of business owners choose to meet us at our Head Office near Newbury, Berkshire;however, our Business Managers are also able to visit you at your own office or alternate suitable

location.To arrange your free and confidential business evaluation meeting please call us on

01635 296191

Free seminarsDuring our free, morning seminars we reveal how our approach to selling companiesworks and why this, as opposed to the traditional methods, leads to a maximised saleprice. A step-by-step guide takes attendees through our sale process, from contactingpotential acquirers and receiving offers through to price negotiation and sale

completion.

If you would like to book onto one of these seminars please visitwww.bcmscorporate.com or call 01635 296191.

Video interviews of past clientsIs our service really as good as we claim? Find out what six business owners, who used our

refreshingly different approach to sell their companies, thought of our process atwww.bcmscorporate.com. Questions covering all aspects of our service, from the initial stages right

through to completion, ensure compelling viewing.

If you would like to discuss the sale of your businessin a relaxed and confidential environment our free

business evaluation meetings offer the idealopportunity for you to do so.

In this issue of i D E A LDeal completions page 4A selection of just some of the deals BCMS Corporate hascompleted in the last quarter

Recent deal statistics page 6A summary of recent deals completed by us.

US Deals page 7Case studies of two US deals completed by ourNew York office.

Keep it in the family? page 8Why family businesses will play a key part in theeconomic recovery and why they represent some ofthe most attractive business opportunities.

Exceeding expectations page 10A serial entrepreneur’s view of the BCMS Corporateprocess for selling businesses.

Selling your business and improvingyour quality of life page 11Stefan Wissenbach, CEO of the Wissenbach Group showshow to manage ‘life after business’.

Your questions answered page 12How do I locate the right number of potential acquirersand what attributes should I look for?

Partnering with BCMS Corporate page 13Dr Mike Sweeting highlights the benefits of partnering withBCMS Corporate.

Terminology explained page 13What is a Sale and Purchase Agreement?

International news page 14Positive signs in the US market and Canadian seminarscontinue to flourish

Philanthropy page 15Charitable work by BCMS Corporate staff

Success gallery page 16The latest deals completed by BCMS Corporate

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Despite this however, and as this recession runs its course,our experience continues to be somewhat at odds withreporting and we have much to be optimistic about.

You will see from the selection of deals completed in the lastquarter, demand by acquirers for good businesses is stillstrong both here and in our other offices around the World.

Also in this issue, our lead article focuses on the role familybusinesses play in the economy. A range of independentsurveys confirm both my own experience as Chairman of afamily business and what our clients tell us. One of the keytraits of many family businesses and smaller and mediumsized private enterprises in general is their flexibility, acapability to embrace change and innovate, not just from thetop down but right across the business. When owners wish tosell though, it is possible to pass the business to a new ownerwhilst protecting the unique culture and employee prospects.

I expect that, like so many other disruptive times in the past,businesses will successfully evolve to suit new circumstancesand ultimately be well placed to thrive. Like many of ourclients we have taken the opportunity that the currentrecession has presented to look at every part of our businessmodel and have honed, fine-tuned and modified whereneeded. Arguably we may not have done this were it not forcurrent circumstances but the benefits have been measurableand sustainable.

“What doesn’t kill you makes you stronger,” an observationby the 19th century philosopher Friedrich Nietzsche seemsapt.

I hope you enjoy reading this Autumn issue of iDEAL.

Brian Rebbettes - Chairman

The UK isstubbornly refusingto follow some ofits closest tradingpartners out ofrecession andinto growth.

iDEAL is published quarterly by BCMS Corporate, Kingsclere Park, Kingsclere, Newbury, Berkshire, RG20 4SW, UK and is copyright protected. Reproduction in whole or part without written permission is strictly prohibited.

While every care has been taken during the preparation of this magazine, BCMS Corporate cannot be held responsible for the accuracy of the information herein or for any consequence arising from it. BCMS Corporateaccepts no responsibility for the views expressed by contributors. Opinions expressed do not necessarily reflect BCMS Corporate policies. The articles in this magazine are intended to be for general information only andshould not be used as the basis for divestment decisions. BCMS Corporate, its staff and contributors do not accept any liability for any loss suffered by readers as a result of decisions made purely on the basis of thecontents of this publication. Professional advice should be taken in relation to all divestment decisions. BCMS Corporate is a trading style of BCMS Corporate Limited.

i D E A L

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Having built a strong and well respected business in the careindustry, CM Community directors Christine and Malcolm Hall wereonly too aware that relationships with people are key to thecontinuing success of any business.

BCMS Co r p o r a t e • D e a l c o m p l e t i o n s

Locating an acquirer for theirbusiness was about far more than

simply a maximised sale price, ethosand company values held equal value.CM Community Services Ltd, a

provider of domiciliary, communityhealthcare and specialist servicesbased in Huddersfield, was foundedby Christine after a career in nursing.Utilising her considerable experience,Christine took the step intofranchising and became a franchiseeof SureCare Community Services, aprovider of temporary andpermanent health and social careservices. The franchise expandedsuccessfully and, in 2002, Malcolmjoined the business. After buying outthe franchise and incorporating thebusiness in 2006, CM CommunityServices Ltd developed into a thriving

Finding an acquirer who provides astrategic fit or even one who is

simply looking to diversify into anobscure market can seem to be a farfrom easy task. However, for manyniche businesses, scarcity value istheir unique selling point. Nichebusinesses rarely come to market andalternate options for potentialacquirers are either extremely limitedor simply non-existent.One such example is Jacqueline

Webb & Co, a company providingcourts/lawyers with reports on the

Home is where the dealis for CM community

A positive report fromJacqueline Webb & Co.

future care requirements of peoplewho have suffered catastrophicinjuries. Despite its niche activity,careful research and highly effectiveprospect generation produced 39signed Non-Disclosure Agreementsfrom potential acquirers, a significantnumber for a business which could beperceived as having few potentialsuitors. From these potentialacquirers a highly significant 24meetings took place and an excellent8 offers were received in total.

BCMS Corporate Deal Leader ScottJones said ‘Due to the diverse rangeof potential acquirers the offers andstructure of the offers were varied.Despite the considerable interest inthe company from potential acquirerswith a strategic fit, our clients

selected a private investor/acquirerwho had previously purchased one ofour other clients from a completelydifferent business area. Overall thesales process ran smoothly with bothour clients and the acquirer beingkeen to complete the transaction.’

venture with 78 staff and a significantnumber of clients, generating a sixfigure turnover.Recognition of the excellent

performance of the business was notlost on many of the potentialacquirers identified in the health andsocial care sector. Indeed, 74potential acquirers agreed to signNDAs to find out more about thebusiness and 15 met to discussfurther information and offers. As aresult 7 offers were received withChristine and Malcolm eventuallyaccepting an offer from SevaCarewhich provided an exceptionalstrategic fit.The sale was managed by Ilan

Elfassy, BCMS Corporate Deal Leader.Says Ilan: ‘We managed to completethe sale of CM Community Services

Niche businesses can often be perceived as offering far greaterexit challenges than those of ‘mainstream’ businesses.

Ltd to SevaCare in a relatively shorttimeframe and despite tougheconomic conditions. Christine andMalcolm wanted to retire but werestill passionate about their businessand the reputation they had built upwithin the care sector. The ethos andcompany values of the potentialacquirer were just as important to theclients as the overall deal value.’In a letter of thanks, Christine and

Malcolm said ‘Contractors don’talways deliver what they promise andwe debated for some time beforesigning up to your services. Becauseof that we want you to know thatyour team delivered in spades.’For a full copy of the letter please

visit www.bcmscorporate.com andvisit the What our clients say page.

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BCMS Co r p o r a t e • D e a l c o m p l e t i o n s

Deal summaryMilsom Industrial Designs Limited

Potential acquirers identified 291

Non-disclosure agreements signed 50

Qualified acquirer shortlist 15

Offers received 5

Deal duration (months) 14

CM Community Services Limited

Potential acquirers identified 284

Non-disclosure agreements signed 74Qualified acquirer shortlist 26Offers received 7Deal duration (months) 12

Jacqueline Webb & Co Ltd

Potential acquirers identified 179

Non-disclosure agreements signed 39Qualified acquirer shortlist 11Offers received 8Deal duration (months) 16

Deal summary key

Potential acquirers identified: The number of prospects

identified by our in-house team of researchers through

their initial desk research.

Non-Disclosure Agreements (NDA) signed: The number

of NDA’s represents the number of potential acquirers

which have indicated an interest in our client’s business

by requesting further information. Before this is given

an ‘NDA’ is signed by them.

Qualified shortlist: The result of an exhaustive process

undertaken by our Project Managers to ensure the most

suitable potential acquirers are taken through to the

latter stages of the deal.

1st and revised offers: The result of our work to ensure

the post-deal benefits of the acquisition are clearly

understood by the acquirers.

Live to market: The point at which our specialist

Prospect Generation Team start to speak to potential

acquirers about an opportunity to acquire a client’s

company.

Appointing agents or distributorsin foreign markets is similarly

unsuccessful with the Institute ofExports reporting that 12 out of 13partners fail in the short term.In view of this, the safest option is to

acquire an existing company in aforeign market and the recentsuccessful sale of Milsom IndustrialDesigns Ltd to US based GeneralPhysics highlighted this. Indeed, threeof the five competing acquirersoriginated from countries other thanthe UK.Milsom Industrial Designs operates

in a niche market, providing specialisttechnical services, predominantly tothe aerospace and defence industryand with both shareholdersrecognising that the time to sell theirbusiness was nearing, they selectedBCMS Corporate to help sell theirbusiness.The sale of Milsom Industrial

Designs proved notable not onlybecause of the level of foreign interest

International interestsecures Milsom

It is well documented that organic expansion into foreignmarkets is fraught with risk. Indeed this route is so perilousthat less than three per cent of companies choose to globalisein this manner.

it generated but also because,unusually, approximately 90% ofthe company’s revenue wasgenerated from one client,AgustaWestland helicopters. Forany potential acquirer, a businesswhich is so heavily reliant on oneclient poses significant risk.However, as BCMS Corporate DealLeader Sunita Meigh explained,“The reliance on one clientpresented far less of a risk than itmay have initially appeared.Milsom had worked together withAgustaWestland for so long thatthe two companies had formed asymbiotic relationship. Many of thestaff employed by Milsom were ex-MoD staff with extensiveexperience of the industry. Thisexperience and the unique workingrelationship that had developedwere simply irreplaceable, therebyremoving almost completely therisk of their client ceasing toemploy their services.”’

BCMS Co r p o r a t e • D e a l s t a t i s t i c s

Recent dealstatistics summary

GlobeWorldwide LimitedActivity: Project management servicesPotential acquirers identified 340Non-Disclosure Agreements signed 50Qualified acquirer shortlist 6Offers received 2Deal duration (months) 21

Barnes & Mullins LimitedActivity: Wholesaler/distributor of musical instrumentsPotential acquirers identified 235Non-Disclosure Agreements signed 35Qualified acquirer shortlist 6Offers received 3Deal duration (months) 19

Tsunami UK LimitedActivity: Exclusive kitchen designPotential acquirers identified 348Non-Disclosure Agreements signed 36Qualified acquirer shortlist 7Offers received 2Deal duration (months) 23

Timstar LimitedActivity: Supplier of laboratory and educational productsPotential acquirers identified 240Non-Disclosure Agreements signed 36Qualified acquirer shortlist 2Offers received 2Deal duration (months) 9

Peeping LimitedActivity: Provider of rail passenger footfall dataPotential acquirers identified 185Non-Disclosure Agreements signed 15Qualified acquirer shortlist 6Offers received 2Deal duration (months) 12

Cortest LimitedActivity: Non-destructive material testingPotential acquirers identified 205Non-Disclosure Agreements signed 35Qualified acquirer shortlist 6Offers received 3Deal duration (months) 10

Jack Ellis Body Protection*Activity: Design and manufacture of body armourPotential acquirers identified 34Non-Disclosure Agreements signed 12Qualified acquirer shortlist 4Offers received 3

Deal duration (months) 10

*Negotiation only project

With a highly successful summer behind usthere isn’t the space in iDEAL to cover every oneof our deals; however we have included aselection from those that we were unable tocover in more detail. If you would like to find outmore about any of these deal completionsplease call us on 01635 296191

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A competitivestep forPharm/DUR Inc.

Without exception, it is the future potential of a business that isthe key reason for an acquisition. For New York based PrecisionPipeline Solutions LLC it was the future of their business whichbrought two very different potential acquirers to their door.

Without exception, it is the future potential of a business that is the keyreason for an acquisition.

Future potentialsecures PPS LLC

In 2008 the business had beenapproached by a seemingly well

motivated industry participant. Therelationship between this potentialacquirer and PPS was very positiveand so the firm chose BCMSCorporate’s Negotiation Only service(see www.bcmscorp.com for moredetails) to help them with themanagement of the transaction.However, with a low offer, a lack ofstrategic motivation and sale termswhich favoured the potentialacquirer, it quickly became apparentto the BCMS Corporate team that animproved offer could be achievedthrough another acquirer.At this point the BCMS Corporate

team took PPS to a wider market,adding strategic prospects andutilising a strong relationship withthe VC and Private Equity community.The Private Equity community took

a keen interest in PPS, with Sentinel

Capital Partners eventually providingthe optimal combination oftransactional value and managerialsupport.‘The energy infrastructure in the

United States, particularly in oldercities, such as those in the Northeast,where PPS operates, has a continuingneed for the services provided byPPS,’ said Michael Fabian, a VicePresident at Sentinel. ‘We believe thisis a promising market in which toinvest, and PPS is particularly wellpositioned for growth.’‘We take great pride in the critical

services we provide for our utilityclients,’ said Jon Selander, founderand CEO of Precision PipelineSolutions. ‘There is considerabledemand for service providers like PPSthat approach utilities with apartnership philosophy and a broadportfolio of services. The Sentinelteam has a reputation for helping

service businesses become strongercompetitors, and we believe theirsupport will help us continue to growour business.’‘All of us at Sentinel are excited to

partner with PPS’s managementteam,” added Eric Bommer, a partnerat Sentinel. “Not only are Jon and histeam highly skilled and experienced,but they possess an outstandingreputation with utilities throughoutthe Northeast. We are eager to helpthem build on this foundation andexpand PPS’s presence.’

Precision Pipeline Solutions LLCPotential acquirers identified 267Non-Disclosure Agreementssigned 37Qualified acquirer shortlist 11Offers received 5Deal duration (months) 18

BCMS Co r p o r a t e • U S d e a l s

For New York based PrecisionPipeline Solutions LLC it was the

future of their business whichbrought two very different potentialacquirers to their door. The US firm,which has a nationwide auditingplatform that reports inaccuracies inpharmacy transactions, identifiedtheir preferred acquirer very early inthe sale process but, after lengthynegotiations, due diligence and theagreement of an S.P.A. (see page 13)

they eventually felt the potentialacquirers didn’t provide an optimalmatch for them.The firm was then taken back to

market and subsequently agreed thatthe highly acquisitive parentcompany of a close competitor mayprovide the answer. Dallas-based ACS(Affiliated Computer Services Inc.), amajor business process outsourcingfirm had a strong track record inacquisitions and had fuelled its

expansion with a number ofacquisitions, growing to a currenttotal revenue of $6.2 billion andstaff of more than 74,000 (one oftheir acquisitions being SyanHoldings to which BCMSCorporate had sold two companiesin the past). With an existingpharmacy audit and verificationbusiness, which the companybegan five years ago, theacquisition by ACS strengthenedthe firms’ position in themarketplace.

Pharm/DUR Inc.Potential acquirers identified 283Non-Disclosure Agreementssigned 24Qualified acquirer shortlist 6Offers received 5Deal duration (months) 25

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BCMS Co r p o r a t e •K e e p i t i n t h e f am i l y ?

Keep it in the family?

How did we get where we are?The current recession is theculmination of one of the mostdistorting decades. World Warsexcepted of man-made folly inmemorable history. In the last decadegovernments – most notably in theWest – kept interest rates too low fortoo long, chasing convenientlyskewed inflation targets which wereset too high in light of price deflationbeing imported from India, China andother low cost economies. There hasbeen lax control over the supply ofmoney leading to a boom of easy[personal and corporate] creditcausing asset bubbles. In the absenceof effective regulatory oversight,reckless speculation by Banks waspermitted, dealing in complexfinancial derivatives which no one,not even the bankers, reallyunderstood. Business models becamedistorted by relying onexcessive debt, theperception of managementcompetence hassubsequently been exposedin many such firms, salarylevels, job and wealthcreation in some firmsand sectors have provento be unsustainable.

The numbersFamily businesses

though largely didn’tsuccumb to thesedistorting conditions, mostcontinued to practicetraditional goodgovernance, runningsound profitablebusinesses with lowdebt. Thankfully, familybusinesses are generallymore risk averse and likelyto take a patient approach togrowth and as such provide,in many cases, a solid

platform for future growth.BCMS Corporate is itself an award

winning family business and many ofour clients are founders, second orthird generation family businessowners, so it is right that we declarean interest here when championingfamily businesses. Surveys from arange of independent sources thoughdo confirm that family businesses arefundamental to innovation, job andwealth creation – in fact, according toThe International Family EnterpriseResearch Academy (IFERA) there is avery close correlation between thenumber of family businesses in an

economy andentrepreneurialactivity. The GlobalEntrepreneurshipMonitor alsoasserts that mostentrepreneurial

start-ups usuallybegin as family

businesses.A report compiled by Capital

Economics, commissioned by theInstitute for Family Business * - titled‘The UK Family Business Sector’ –aggregated evidence from a widerange of surveys of family firms.Statistical highlights revealed thatfamily firms are estimated to accountfor a remarkable 3 million of the total4.6 million private sector enterprisesin the UK economy and, 41% of allfirms employing 10 people or more.Further, family firms account for 38%of turnover inthe privatesector andcontribute

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Though not of their making, family firms will play a vital role in the economic recovery from the currentrecession – they are major contributors of new job and wealth creation. Innovative, resilient andadaptable, succession is not always right or practicable for a family firm.Where a sale is the best route,they represent, in terms of potential, some of the most attractive opportunities for acquirers.

BCMS Co r p o r a t e • k e e p i t i n t h e f am i l y ?

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twice as much to the economy asprivate equity-backed firms (whencompared with British VentureCapital Association estimates for theperformance of Private Equity-backedfirms). Family businesses account foraround 42% of private sectoremployment, providing employmentfor 9.5 million people.

Family valuesImpressive as the statistics are, it isperhaps the behaviour of ownerswhich really reveals the true natureand relative strengths of familybusinesses. Particularly pertinent tothe current economic circumstancesare findings in the Coutts 2005Family Business Survey whichrevealed that family firms are morelikely to invest for the long-term andfocus on long-run returns, ratherthan quarterly results. There isevidence that families tend to drawsmaller salaries and dividends,allowing more profits to be re-invested back into the business. In afurther survey “Trust as a competitiveadvantage: why family firms have anedge in the global marketplace,” byBaskin, it is argued that familybusinesses are more prepared thanother firms to continue investingduring downturns, giving them anadvantage over other quoted andPrivate Equity-owned firms whereinvestment tends to follow cash flowmore closely. Other findings across arange of surveys suggest that infamily firms, managers and ownersinterests are better aligned, staffloyalty is higher, working practicesare more flexible, corporate socialresponsibility is taken more seriouslyand the management approach ismore flexible with quicker decisionmaking.There are also well documenteddisadvantages such as the danger ofnepotism; a reluctance to bring inoutsiders or Non-Executive Directorsin larger firms; family conflicts, suchas divorce and infighting, all of whichmight disrupt the business andhamper growth. There is goodevidence however that the advantagesoutweigh the disadvantages.Manchester Business School created aFamily Business Index of publiclyquoted family run firms, whichoutperformed the FTSE All-Share byan impressive 40% over a ten yearperiod 1995 to 2005.

Succession or sellDespite their many strengths, family

firms do struggle in much the sameway as any other private firm withthe issue of succession or exits. Anannual survey by the Department forTrade and Industry (DTI, now part ofthe Department for BusinessEnterprise and Regulatory ReformDBERR) found that 77% of familyfirms in the SME sector are controlledby the first generation, 10% by thesecond generation and 6% by the firstand second generation. Further, aBarclays survey of family firms, “AFamily Affair; Today’s FamilyBusinesses,” suggests that most haveno definitive plans about what to dowith the firm in the future, with 61%of owners saying they had made nodecision about what would happenwhen they stepped down from thehelm. Of the remainder, 16% hadalready decided on a successor, 13%planned to sell the business, while10% planned to close down.Where owners of family firms no

longer see generational transfer asviable or desirable, they provide someof the most compelling opportunitiesfor acquisitive trade or Private Equitybuyers; these firms have significantpotential for growth. It is clearly vitalthat the potential of such a significantcontributor [Family Firms] to theNations’ economic well-being ismaximised. A ‘knowledge gap’ clearlyexists, preventing owners of familybusinesses making definitive plans.Going some way to addressing this‘knowledge gap’, BCMS Corporateruns around 60 free seminars eachyear in the UK and its seniormanagers and directors are invited tospeak at numerous events in the UKand overseas on the subject of sellingfor maximum value. For those 84% offamily business owners who haveeither no clear plans about successionor selling or who may even beconsidering closing down, the BCMSseminars may well be helpful indeciding what the right course ofaction might be, providing a valuableperspective before crystallising plans.

Their own wordsVia our website, bcmscorporate.com,

you can also access video recordingsof interviews with a small selection ofBCMS Corporate clients. Onerecording features Stuart and GailShreeve, a husband and wife team

who established their family businessSomers Refrigeration Ltd in 1990, abusiness supplying temperaturecontrolled vehicles predominantly tothe food industry.Stuart and Gail originally attended

one of our seminars and comparedwhat we had to say with what wasoffered by ‘competitors’. In Stuart’swords, “BCMS was the most expensiveof all those we considered but webelieved they had the resources toundertake the sale. I can highlyrecommend BCMS.”

Typical of many family businesses,Stuart and Gail were very close totheir staff and the successful buyerhad to offer stability and continuityfor them. One prospective buyer hadplans to close the existing site andconsolidate operations which wouldhave threatened jobs – this wasrejected immediately by Stuart andGail. Ultimately the sale of thebusiness was concluded with the‘right’ purchaser (culture could bemaintained) at the ‘right’ price forStuart, Gail and the staff. Stuart andGail’s expertise has not been lost tothe business, they have continued toprovide consultancy services andhave set up a joint venture with thenew owners.You can find a list of all our

seminars by visiting our websitewww.bcmscorporate.com where youcan also book a seminar seat. You canalso view Stuart and Gail’s account ofworking with BCMS Corporate as wellas additional recorded interviewswith other clients.*The Institute for Family Business

was established in 2001 as anindependent, not-for-profitorganisation. The UK Family BusinessSector report can be viewed atwww.ifb.org.uk.

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BCMS Co r p o r a t e • A r e f r e s h i n g l y d i f f e r e n t a p p r o a c h

Paul Daniels is what some wouldcall a serial entrepreneur, he

admits that what he is best at isseeing solutions to problems,developing those solutions to thepoint where they have beencommercialised and their value hasbeen proven, before selling thatbusiness and moving on to his nextchallenge.Like most serial entrepreneurs, by

necessity, Paul has also become aserial deal maker, going through thebusiness sale process on a regularbasis. He explained, “My approach todeal making in the past has beenalmost intuitive, selecting the buyerand negotiating the best deal. Whenwe set a company up we often had abuyer in mind – typically thisapproach involved little or nocompetition.”Paul was introduced to BCMS

Corporate at the point where he wasconsidering an exit from two of hiscompanies and was persuaded to atleast investigate the BCMS Corporateapproach. The companies operated intwo very different sectors, trafficcontrols and advertising. “I have

A refreshingly different approachMost of our clients will only ever undertake one business sale,

but exactly what does a serial deal-maker think ofthe BCMS Corporate approach?

experience of many ‘competitors’ toBCMS Corporate, for me BCMSCorporate had the best track record”.After an initial discussion, Paul was

invited to our Head Office inKingsclere (we like to ensure that allour prospective clients at some pointget a chance to see for themselves thescale of our operations). Paul said, “Iwas also persuaded by the resourcesdeployed by BCMS Corporate onbehalf of their clients. Their researchdepartment was substantially largerthan any I had encounteredpreviously (see Your questionsanswered – page 12). He continued,“I was also impressed by a teamapproach, each member undertakingparticular specialisms, each workingto their strengths.The logic of the BCMS Corporate

approach was compelling so wedecided to place both mandates withBCMS Corporate and both companiessold at a price we were extremelyhappy with. Crucially, as BCMSCorporate assured us, the processcreated competition and brought tothe negotiating table some very‘unlikely’ competing buyers we would

ordinarily never have considered – infact they delivered to the letter,exactly what they promised.”Despite being a serial deal maker,

Paul Daniels’ motives are still verymuch aligned with those of themajority of our clients. He is mostlyinvolved with his businesses fromstart-up through to sale and as such,there is a very strong bond betweenhim and his staff. This was very mucha factor in selecting the successfulbidder in each case.The traffic controls business sold to

a ‘trade’ buyer, the bid was actuallythe third highest but it was the bestfit, in Paul’s view, for the companyand staff. The advertising businesssold to a Private Equity buyer withPaul Daniels retaining a significantstake by re-investing some of the saleproceeds back into the business.

You can listen to Paul Daniels’account of his experience by clickingthe ‘Client video interviews’ link onthe home page of our websitewww.bcmscorporate.com.

BCMS Co r p o r a t e • S e l l i n g y o u r b u s i n e s s

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Quality of life is more important than quantity of wealth. A bold

statement, but for over 19 years we at The Wissenbach Group have

been working with our clients to help them improve their quality of

life. We passionately believe that the rest of your life should be the

best of your life – and why not!?

So, what do we mean by ‘quality oflife’? To us quality of life is very

much about being in good health andhaving the freedom to do the thingsyou want to do, with the people thatyou want to do them with. Two of themost important commodities whichenable you to achieve this are timeand money. We often find thatbusiness owners and entrepreneurs,in particular, have an imbalance – thetime and money aspects of their livesare not necessarily in harmony. Wemeet lots of people who have plentyof money but not enough time or incontrast, too much time and notenough money. Neither situation is arecipe for future happiness.It’s common for business owners

and entrepreneurs to find themselvesin a position where the business theyhave spent a considerable time,energy and passion building hasbecome all-consuming. They findtheir time filled doing things that areno longer particularly enjoyable –sorting out staffing problems,managing turnover, suppliers etc.Freeing yourself from these responsi-bilities means you are in a position togo on and enjoy the freedom ofhaving more time to do the thingsyou want to do.Selling your business for maximum

value can provide you withopportunity. Opportunity to pursueyour passions, other businessinterests and enjoy the freedom ofspending time with those that youlove, doing the things that make youhappy. I believe that not only do you

want to get the best possible price foryour company, but crucially beforeyou sell, you also need to think aboutthe impact of having sold yourbusiness and what that actuallymeans to you in terms of your qualityof life.One of the most common mistakes

that business owners make when itcomes to selling their business is thatthey focus entirely on the moneyrather than quality of life. In fact,some entrepreneurs’ lives are sodominated by their businesses thatdoubts can creep in as the conclusionof the sale approaches – almost asense of panic – a “what do I do now”crisis of confidence. No one ever diedhappy because they’d made lots ofmoney – a distorted/incorrectperspective can often be provided bytaking that approach. The key is thelife that you are living.Picture a large softly lit room, filled

with family members, extendedfamily, friends and people you enjoyspending time with. At the end of theroom there is a box. You’re init……it’s your funeral. What wouldyou want to hear being said aboutyou? Seldom do we find that peopleanswering this question expect peopleto be talking about how much moneythey had made. They will hopefullybe talking about how you’d lived yourlife, the contribution you’d made toother people’s lives, how much they’denjoyed time with you and the qualityof the relationships you’d built withfamily and friends.

The Wissenbach Group helpsbusiness owners and entrepreneursvisualise and plan better futures, andthis often includes thinking about lifepost-sale. We have, during this time,identified five key steps to improvingfuture happiness:11 - Proactively consider how you

would like the rest of your life tolook. People seldom plan to fail, theysimply fail to plan.22 - Establish the financial

implications of what you want to do,i.e., what will it cost to achieve andenjoy your desired lifestyle? This iswhat we call your Magic Number™, -the amount of accumulated wealthyou need in order to be financiallyindependent, enjoying your desiredlifestyle, for the rest of your life. 3 - Reference the financial

implications of your desired lifestyleagainst your current position. 4 - Decide on what needs to change.5 – Take action! Implement change –

time waits for no man! Some peoplefind that working with us is the mosteffective way to ensure that action istaken and progress made. As BillClinton said, “When our memoriesoutweigh our dreams, we have grownold.” I hope this article has providedyou with some food for thought andwish you all the best for your futurehappiness.Stefan Wissenbach is the CEO of The

Wissenbach Group. He can becontacted on 01676 524460 or byemail - stefan@wissenbach.co.uk

Selling yourbusiness andimproving yourquality of life

A: It is important to note thatvolume is not a goal in itself,

the average of 230 potential buyers issimply a consequence of thecomprehensive nature of the researchwe undertake and the man-hours weinvest, on behalf of our clients, inadditional screening andqualification. Is this necessary? Yes,absolutely. As a starting point, webelieve there is simply no otherreliable way of selling a business forits maximum value. I have explainedmore about our unique capabilitiesbelow which I hope furtheremphasises the necessity of what we do and how thisbenefits our clients.

Source dataIn pure financial terms our investment in third party

data is, after the Company’s salaries, our biggestinvestment. We review data products constantly to ensurethat our researchers and analysts have access to the bestdata available. Unique to BCMS Corporate though, andsomething which no amount of money could buy, is ourown database containing details of acquirers, their needsand wants. This database grows on a daily basis, it is theproduct of all contact that all staff, right across thebusiness, have with companies seeking acquisitions. Thisoften gives us privileged information, not in the publicdomain, about a company’s strategic intent. It can includefor example, information on diversification plans. Thiscommonly results in the final research documentcontaining companies which appear, based on publicdomain information, to be unrelated to our clientsbusinesses. It is surprising how often an ‘unlikely’company becomes the successful buyer.

The human factorData is important but the human factor is absolutely

critical to success. Databases are only as good as the waythe information is categorised, assembled and can besearched. Companies are invariably listed under broadranging generic headings which makes ‘drilling down’ tolocate only those that are relevant very difficult. Toovercome this problem, BCMS Corporate has assembledwhat we believe is the most experienced ResearchDepartment in our sector – collectively our ResearchDepartment has more than 80 years experience to

Your questions answeredIn each edition of iDEAL, a senior member of our management team will address oneof a number of common questions we are asked by business owners. In this editionDerek Wickens, Head of Research at BCMS Corporate, explains our unique approachto research and why it is both necessary and effective.

underpin their judgement.An initial search using criteria

agreed with our clients, can producethousands of results, the painstakingprocess of qualification then begins.We view company websites, checkcompany structures, identify themost appropriate decision-maker,review announcements to market (ifPLC’s), product ranges, customersetc. This enables us to makeinformed judgements about whichcompanies have the best synergies,allied to other factors like strongfinancials.

Synergies, in other words, overlapping features andbenefits are vitally important, they are the things whichwe know from experience, strategic buyers view as mostvaluable.

Recent examples1. An energy consulting company we represented wasbought by a forestry and engineering firm. We onlydiscovered the ambition to diversify into energyconsulting via an inconspicuous link from the buyers’website.2. A traffic management product company was bought bya lift control company, entered in our own database aftera conversation with one of our staff, about their wish todiversify. This buyer has now gone on to buy anothercompany whose owners were represented by us. In eachcase the buyer was part of a competitive bidding processinvolving other strategic buyers we had identifiedthrough the customary research process.3. A supplier of sports equipment to schools was boughtby a manufacturer of street furniture. Again, the buyerwas only identified through the meticulous, manualqualification process.Without this approach we passionately believe that your

most suitable acquirer may never appear in the final list.All our prospective clients are very welcome to tour ourhead Office to view for themselves the scale of theresources which are applied to the task of selling theircompany. To arrange an appointment for a no-obligation meeting

simply call 01635 299616 and ask to speak to one of ourbusiness consultants.

Q: I downloaded your book from your website which states that you locate, on average, 230 potential acquirers for each of your clients. I’ve been told by other business sales companies that this isn’t necessary. Why do you do this?

B CMS C o r p o r a t e • Y o u r q u e s t i o n s a n s w e r e d

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The majority of our clients hear about BCMS Corporate at one of our weekly seminars, however a significant number are referred to us by a select group of ‘partners’

which introduce BCMS Corporate to their business clients when they are considering a sale.

BCMS C o r p o r a t e • P a r t n e r i n g

The Sale and Purchase Agreement(SPA) is, in its most fundamental

form, the legal contract that obligatesan acquirer to buy a vendor’scompany and the conditions underwhich this will take place. Its contentsare the culmination of often lengthyand complex negotiations.Customarily, an acquirer's lawyer

provides the initial draft of the SPAhowever it is advisable that thevendor’s lawyer should also draft thesections which are particularlyimportant to the vendor. In themajority of cases this relates to theclauses containing representations

What is a Sale and Purchase Agreement?BCMS C o r p o r a t e • T e r m i n o l o g y e x p l a i n e d

At BCMS Corporate we will beextending the number of

‘partnerships’ over the next twelvemonths and, if you feel our servicesmay be complimentary to your ownand, crucially, meet the needs of yourclients, we would welcome an initialdiscussion. Typically our ‘partners’are accountants, consultants, IFAs andoccasionally individuals.It is extremely important to us that

our ‘partners’ clients truly benefitfrom recommending us. We wantboth you and them to feel totallycomfortable with the professionalismand effectiveness of the service weprovide. As a result we would like toinvite you to one of our free seminars(dates below) which have beenspecially tailored for referralpartners, allowing you to find outmore about us and how we can helpboth you and your clients. In just halfa day we will revolutionise the wayyou see business exits. Additionally,we would also be very happy to

arrange a tour of our Head Office toshow you what we describe at ourseminars being put into action. Our existing ‘partners’ share our

views on the inherent flaws intraditional methods of selling. Theyrecognise that many company ownersdo not take their businesses ‘tomarket’ because they do not thinkthey can obtain the kind of moneythey believe their company is worthor raise the money they feel theyneed. Others believe that there is nodemand for a business like theirs. In fact, any company is worth as

much as someone is prepared to payfor it. If a company is poorlymarketed, or not marketed at all, thenof course there is going to be a verylow benchmark on value. Manycompanies do not sell because theright buyers, with the right motives,do not know they are available. Manycompany owners receive ludicrouslylow offers because buyers believethey have no options.

The refreshingly different approachto the sale of privately ownedcompanies has made BCMS Corporateinto a market leader; securingmaximised sale prices for hundreds ofbusiness owners. Working as a referral partner with

us is a ‘double win’. Your clients’businesses are placed in experiencedand successful hands whilst youreceive a share of our standard feeswhen they become our client and aslice of our success fee when a deal iscompleted.If you are interested in becoming a

BCMS Corporate referral partner,please contact Dr Mike Sweeting atmike.sweeting@bcmscorporate.com or 07779 652 066.

and warranties about the business.Ideally, a vendor should try to avoid,or at least limit, any warranties orguarantees for which they can be heldlegally accountable. The SPA shouldalso clearly state which liabilities theacquirer assumes and which willremain with the vendor.The SPA is often a lengthy and

complex document; for some of thelarger deals the SPA can run intohundreds of pages. It is vital that thevendor fully understands theimplications of all elements of theSPA. Once the vendor and acquirer have

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Partnering with BCMS Corporate

agreed the contents of the SPA it issigned by both parties. The contractwill state the date at which the finaltransfer of ownership and possessionof the business will occur, and whenthe seller will get the money.

Seminar dates25 November – Leeds – Thorpe Park1 December – Birmingham – The Belfry8 December – London – Maida Vale

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BCMS Corporate success in North America, Canada,the Mediterranean, Eastern Europe and Scandinavia.

BCMS C o r p o r a t e • I n t e r n a t i o n a l

Internationalnews

United StatesThe business environment continues

to improve in the North Americanmarket. While small and middlemarket transactions have maintaineda healthy tempo during the recession,it is considered a good sign here thatthree major deals bode well for the

M&A sector as awhole.Specifically,Walt DisneypurchasedMarvelEntertainmentInc., BakerHughespurchased BJServices Co., andeBay announced

the sale of its majority stake in Skype,a transaction that multiple parties bidon. These recent large strategic salesare a distinctly positive sign abouteconomic stabilization, rebound, andan unlocking of the credit markets.

In the market for transactions,$100m and below, we have seen realinterest in ‘bolt on’ and product leveltransactions. PE firms have also beenobserved purchasing small firms tosupplement existing portfoliocompanies because less credit isneeded per transaction. Adding further weight to theimproving market conditions were thesales, over the summer months, ofPrecision Pipelines Solutions LLC andPharm/DUR Inc., both largetransactions (more details on page 7)and the acquisition of further newclients in Oklahoma, Georgia andLouisiana.

Mediterraneanand EasternEurope

The effects of the unstable economicenvironment continues to affect

all business operations in Romaniaand Bulgaria, however the Turkishmarket is beginning to recover fromthe effects of this as confidence in theeconomy improves. Despite thedepressed Romanian and Bulgarianmarkets an ever increasing number ofvisits to the multi-lingual website(www.bcmsaka.com) continues todemonstrate that there is stronglevels of interest in the M&A marketin Eastern Europe.

For more up to date information onthis market please visit our new blogat http://www.bcmsaka.com/blog/tr/(English/Turkish languages only).

CanadaEarly September marked BCMS

Corporate’s first seminars inBritish Columbia with over 150attendees in addition to well attendedseminars in nearby Seattle and Utah.North American Director BobGoldsmith said “Canada is anothernew market for us and the responseto our seminars has been incredible.The seminar in Vancouver was one ofthe largest we have seen.” To managethe influx of resulting new clients anoffice has now been set up in Calgary,comprising a (UK) Team Manager,Deal Leader, Project Manager, andResearcher. Further seminars inCanada are planned before the end ofthe year.

Elsewhere, in Texas a specialisedProspect Generation Team has beenset up to supplement the existingproactive calling capability. In totalthe BCMS Corporate team in NorthAmerican (USA and Canada) is 40strong and continues to expand.

Paddle powerSam White, a BCMS Corporate researcher and a friend,

David Hollow have recently returned from spendingsome time in Uganda working at an orphanage. Theirexperience left a profound impression on them – theywere both struck by the contrast between the extremepoverty they encountered, the warmth of the welcomeand sheer resilience of the people they met. More thanhalf the Ugandan population is currently living belowthe internationally prescribed poverty line. Samcommented, “The orphanage is an incredible place,doing tremendous work with orphans – we met someawesome people.”

Now home Sam and David will continue to support thework of the orphanage. Their first fund-raising challengewas to canoe as much of the non-tidal Thames betweenWiltshire and West London as possible over what turnedout to be a gruelling 48 hours.The distance between the two points is 135.5 miles and

would typically be attempted over 7 days. “Dave hadcanoed a few times before but I last canoed when I was9, so what was already a very tough challenge was madeeven more daunting,” explained Sam. “We were also verymuch relying on the weather forecast for light winds,paddling into a headwind is hard work,” he continued.“The first day weather conditions were excellent and

progress was rapid, day two however was a differentstory of strong headwinds and progress slowing to acrawl. As soon as we stopped paddling we were blownbackwards so there was absolutely no respite,” he said.In light of the conditions completing the entire 135.5

miles in 48 hours was clearly not possible butdetermined to complete as much as possible Sam andDavid resorted to night paddling, the route lit by headtorches. Despite the weather conditions, some impressiveblisters and aching shoulder joints they covered animpressive 80 miles reaching Caversham Bridge, Readingand spending more than 30 hours paddling the canoe.

B CMS C o r p o r a t e • P h i l a n t h r o p y

Philanthropy“Do what you can, with what you have, where you are.”Quote on philanthropy attributed to TheodoreRooseveltIt never ceases to impress us how much of theirtime many of our staff and indeed our clientsdevote to community and charitable causes.In each issue of i D E A L we will highlight justsome of the community and charitable activitiesour staff are engaged in, together with details ofsome of the charitable projects BCMS Corporate,as a company, also participates in.

Their efforts have raised £1,250, with £600 comingdirectly from BCMS Corporate staff. “This will go a longway to helping improve the lives of the orphaned childrenin Uganda. I know my colleagues devote a great deal oftheir own time and money to various charitable causesand once again they have been very generous. Thank youall so much,” Sam said.“I would also like to mention Phil Petty (also a researcher

at BCMS Corporate) who acted as our support crew. Hehelped massively with the organisation, everything fromfinding us a canoe to borrow to raising money. He was oncall the whole time.”The ‘New Hope’ Ugandan orphanage helps to care for,

and raise, orphaned children. It puts orphans into familygroups with other youngsters to promote a sense ofbelonging where they learn, play and grow up together.Every penny donated goes towards providing medical

and educational supplies, food and towards supportingnurses, teachers and doctors to continue their life-changing work. Many volunteers help out at ‘New Hope’who themselves are reliant on donations from family andfriends, but with such widespread poverty their support ishard to sustain and is dwindling.‘New Hope’ will welcome any and all support to continue

to provide for its present orphans and to be able to offer ahome and ‘family’ for greater numbers.Visit www.newhopeuganda.org for more details.

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BCMS Corporate Plantagenet House Kingsclere Newbury Berkshire RG20 4SWT: 01635 296191 F: 01635 299502 E: info@bcmscorporate.com www.bcmscorporate.com

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