Ireland's best dealmaker told us the top ways for anyone to sell a company
IBI’s Leo Casey reveals how to get buyers to take you seriously.
SELLING YOUR COMPANY is one of the toughest challenges in business. After pouring blood, sweat and probably a shedload of coin into your firm you have every right to cash in if you want, but how do you go about doing it?
To get some insights into brokering a sale, Fora spoke to Leo Casey, a director at one of the best deal-makers in the country, IBI Corporate Finance.
MergerMarket has ranked the fully owned subsidiary of the Bank of Ireland as Ireland’s top deal-maker by number of transactions for 10 out of the last 11 years.
It has advised on many of the best-known deals in the country, such as the sale of the government’s stake in Aer Lingus to IAG, as well as transactions with dozens of mid-sized companies including the sale of the Tayto crisp brand to Largo Foods.
IBI advised the Government on the sale of its stake in Aer Lingus
Expand abroad
In Casey’s opinion, being able to show that your company is seriously expanding abroad is the best way to attract the interest of big players who would either be interested in buying or investing in your firm.
“Typically growth and internationalising is the thing that investors are looking for,” he said.
“A business that’s exclusively Irish that has a chain of 30 outlets and could get to 40 over five years is just not going to excite people as much as a company that is selling into five countries already and with a bit of capital and some marketing could drive into the States, or an X-hundred million market.”
For those who are weighing up whether or not to sell some or all of their firm, Casey said that preparation is key.
“Make sure you have your house in order is what we say time and again to companies who are coming in. Whether you’re raising equity or selling … the company is going to be wide open, so if there is an issue that you know about sit down with your advisers and devise a strategy to work around it,” he said.
IBI Corporate Finance director Leo Casey
Housekeeping
The first main area Casey advises companies to focus on is ‘general housekeeping’. “Make sure your accounts and company filings are up to date and that your corporate structure is clean and tidy,” he said.
“You don’t want to find out late in the day such as share options promised to someone which could change the deal.”
Locking down major customers is another obvious precaution – “No verbal contracts,” Casey said – while companies with valuable products or IPs should make sure their patents are protected.
Making sure that your story is straight is crucial, and companies should have a clear growth path.
“You need to know what your growth plans are and what you need the money for,” he said. “Saying; ‘I want €10 million, €2 million for sales, €2 million to hire X number of R&D staff … is a lot better than saying ‘I need €10 million because I think there is a really good market for this product’.”
Casey also advises holding out for a while if that ‘one big sale’ is just over the horizon.
“If there is a big milestone around the corner, hit it before you go to market,” he said. “Especially if you are at an early stage, the more meat you can put on the bone and more commercial traction you can get the better.”
