Case Study 3

 

The Challenge

We were contacted by a business owner in the security industry who was ready to sell his business having received 3 approaches from interested parties in the past 12 months.

 

The company had been performing well but he was concerned that the valuation being placed on his business was far less than he felt it should be. Interested parties never made a realistic offer after due diligence was conducted.

 

The Solution

The critical growth assessment provided some real insight into the issues which affected the company valuation. Not only was 85% of the revenue concentrated across 4 clients, there was no recurring revenue model set up which made predicting future income very difficult.

 

There was also little in place in terms of documenting how the business actually worked. We worked with the client to create a new USP and then embarked upon a new marketing campaign which allowed them to reduce their reliance on their key contracts.

 

We also helped the client to create a new business manual which would enable future due diligence reviews to be conducted more effectively

 

The Result

The client was approached again by a new party 6 months after we completed our assignment and the results were as follows:

 

  • Client received an offer 270% higher than the best offer given then previous year
  • The due diligence process was far more effective than previously experienced
  • No client in the customers portfolio made up more than 10% of revenue as many new customers had been onboarded post the marketing campaign
  • The client introduced a new annual maintenance plan which now accounted for 22% of their total revenue (and growing)
  • The sale is due to fully complete before the end Jun 2019 (legally binding terms now agreed)
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