Partner Article

Family business owners happy to sell legacy

Owners of family business have no qualms about selling the business instead of keeping it in the family, according to research by finance company KPMG. The study found that 62% of family business owners would be open to a tempting offer for their business from an external buyer. This compares to 52% for owners of standard businesses.

Of those businesses which have been sold in the last two years, 33% of the ex-family owners and 53% of all ex-owners admitted that receiving a tempting offer affected the timing of their exit, the survey revealed. However, when asked how long businesses would need to prepare for exit, the stock answer was between one to three years; so clearly if an offer arrives unexpectedly, owners have a far shorter timeframe in which to assess the offer’s value and come to a decision.

Adrian Dray, partner, KPMG Corporate Finance, commented: “The decision to sell a business is all about price and timing and only when both of these are right can the offer be described as tempting. If the offer is compelling, owners need to move quickly and with confidence. So even if you haven’t got the ‘for sale’ sign up, the motto is: always be prepared.”

While 29% of all current owners (both family and owner-managed) have indicated that their intention to exit via a trade sale, 25% chose succession as their leading exit option. However, when surveying the ex-owner respondents (both family and owner-managed), not a single business had gone down the succession route. And out of this ex-owner group, 84% of family businesses felt that they had sold up for a good price. 63% of family businesses were sold to trade buyers, with a further third being bought by private equity or management. 75% of ex-family businesses would not consider taking their business back after the sale. Only eight per cent claim to have missed their business after selling.

This was posted in Bdaily's Members' News section by Ruth Mitchell .