Benchmark International is pleased to announce its new flagship office at One New Bailey, Manchester.READ MORE >>
Benchmark International is delighted to announce the sale of Birmingham-based company, Software Enterprises (known as Global Rostering System – GRS), to Totalmobile.
Established in 1995, GRS is a software development company that has produced its own computerised rostering system which builds efficient staff rosters and ensures the right staff are assigned to the required locations and shifts. The product is best suited to the emergency services and 24/7 operations with customers predominantly hospitals, police forces and ambulance services. Solutions are currently being used to roster over 100,000 emergency services field-workers in the UK.
Totalmobile develops and supplies enterprise application software that manages the workflow of mobile workers. It is backed by private equity company, Horizon Capital.
Going forward, GRS’ software will be rebranded and integrated into Totalmobile’s comprehensive suite of SaaS field service management products.READ MORE >>
Benchmark International is delighted to announce the successful sale of Essex-based Knowles Associates and Ensure UK, to an employee ownership trust (EOT).READ MORE >>
Benchmark International is delighted to announce the partial sale of Cheshire-based precision engineers I.C.P.M.S. Cones to an entity ultimately owned by the shareholders of Michigan-based company, Alpha Resources LLC.
Incorporated in 2002 following an MBO by owners Dean White and Gareth Evans, I.C.P.M.S. Cones is a precision engineering company specialising in the design and manufacture of electroformed metal cones for use in mass-spectrometry scientific instruments. Alpha Resources is a manufacturer and distributor of analysis consumables, offering equipment for elemental analysis in multiple industries.
With RAC’s niche technical production process and strong relationships with a number of blue-chip clients, the acquisition provides Alpha Resources the opportunity to build on I.C.P.M.S.’s market stature, as well as offer complementary products to its current range. Both Dean and Gareth will remain with the company as Directors and shareholders to ensure the continued success of the combined entities.READ MORE >>
It is now well-documented that care homes have been closed to visitors since early March, leaving already vulnerable residents feeling isolated and cut off from family and friends. Hospices and hospitals have also been forced to put severe visiting restrictions in place to protect people in their care.
In many instances, it has been the carers, themselves, going above and beyond by letting those in their care use their own personal devices to reach a family member, and to keep in touch with loved ones by video, particularly where the residents do not otherwise have access to technology.
In the most tragic cases, the devices are used by patients saying goodbye to their loved ones for the last time.
Like many businesses, Benchmark International has been keen to find ways of supporting those on the frontline. As a technology-driven business, we are fortunate to have facilities that enable seamless communication around the world, and we recognised an opportunity to make the same facilities available to the most vulnerable in our community, with the hope of bringing them some comfort during difficult times.READ MORE >>
Nick Hulme (Managing Director, Manchester UK) summarises his recent article, ‘7 Pointers from 30 Years’ Experience in the UK’, in this short blog.
1 - It’s Not Just About the Numbers!
Although the normal formula for valuing a company involves multiplying ‘earnings’ by a chosen ‘multiple’, a company is only worth what a buyer is prepared to pay for it.
The numbers are important, of course, but there may be more to the opportunity than the numbers show. Advisers need to take a ‘bird’s eye view’ and focus on those factors that will drive the highest value with the right buyer, not just on the numbers.
They should constantly focus their conversations and analyses on the opportunity, despite the maze of numbers that fly around.
2 – ‘Multiples’ are a Minefield
Desktop research, comparisons to quoted P/E ratios and the considered views of trusted advisers can create a myriad of distortions as to what might be the correct multiple for a company.
It’s easy to see how factors such as growth, a great management team, high margins and, nowadays, tech-enablement will not only deliver the best multiples but add to that the impact of both competitive tension and structure. Any first-time seller could quickly have their heading spinning.
Benchmark International’s Valuation Matrix is a great tool for showing clients a range of valuation scenarios based on different multiples and views of earnings. This is used to educate clients from the start, and to hand-hold them to making the right decisions when the time comes. It is normally updated throughout the process.
3 – There’s More to Earnings than Reported Profits
Getting a real understanding of underlying earnings will be far more important to any buyer than what’s recorded in the company’s annual accounts.
The term we use in the UK for a fair assessment of sustainable adjusted earnings is ‘Maintainable Earnings’. This will often take account of the adjustment of shareholder salaries to market rates and the elimination of true one-off costs.
Care needs to be taken when adding back depreciation. If there is a significant cash cost to a business of replacing its assets annually, a buyer will factor this cost into its assessment of maintainable earnings if adding-back depreciation.
The terms ‘Adjusted EBITDA’ (earnings before interest, tax, depreciation and amortisation) and ‘Historical EBITDA’ are often used interchangeably with Maintainable Earnings. I much prefer the latter as it’s a better reflection of the numbers and the story behind them, and is not laden with reference to the past.
4 – You Can’t Add the Value of Company Assets to the Valuation
If assets are truly ‘surplus’ to the company’s operations then perhaps they can be added to the valuation, but if they are fundamental to the company’s ability to generate its earnings, adding them to the valuation would be double counting. As would be attaching a value to ‘goodwill’. Buyers tend not to be too fond of this!
The most common ‘surplus asset’ we deal with in the UK is what we refer to as ‘free cash’, the opposite of which is debt. It’s much easier for clients to understand why ‘free cash’ can be added to the valuation than it is for them to understand why ‘debt’ needs to be deducted. There are a couple of easy ways to explain to clients in the article itself.
5 – Complex Deal Structures Can Cloud Valuations
A buyer can make what looks to be a great offer but understanding how the deal is structured - when and how the money is paid – makes all the difference.
The most common types of ‘structure’ in the UK are vendor loan (or defcon, where some of the consideration is paid over time), earn-out (where future payments are made depending on performance) and retained shareholdings (where the seller might keep a stake in the company or in its new owner).
‘Structure’ is generally used to bridge the gap between seller and buyer views of valuation and a buyer’s ability to fund a deal. It’s rare to see offers for companies that don’t include at least some element of structure, so issues such as buyer credit status, interest and security are key.
6 - Beware Valuations Based on Net Asset Value (NAV)
On rare occasions, particularly with companies where expensive assets are fundamental to their operations, the value of the company’s ‘net assets’ in the accounts is higher than a fair valuation derived using the normal formula. This can create an illusion of higher valuation for some clients, especially when some experts produce articles listing three, four or more ways of valuing a company.
This does not mean sellers can find the valuation basis that gives the highest valuation and expect to be able to market their company on that basis. Whatever the size of a company’s overall net assets value, its market value will almost always be more closely linked to earnings and cash flow than the size of its balance sheet. That’s not to say we don’t do deals based on net asset valuations plus ‘something for goodwill’, but they are rare.
7 – Clients Often Know Enough Already
Sellers will normally know enough about their own company to make an informed assessment of how their company might be valued in their market, so advisers should hone-in on these instincts.
Any questions, please read the full article here.
READ MORE >>
Members from Benchmark International completed a Memory Walk last weekend to support the work done by the Alzheimer’s Society.
Memory Walks are held throughout the year around the UK to fund vital research conducted by the Alzheimer’s Society into the cause, care, cure and prevention of dementia.
Its ambitions are: “To reach every person who has a diagnosis and wants our help; to change the conversation on dementia and mainstream the rights of those affected by it; and drive the research agenda – working tirelessly to improve support today and unlock the answers for a cure tomorrow.”READ MORE >>
The latest league table for H1 2018 by Mergermarket, part of Acuris, has named Benchmark International’s Nick Hulme as one of the top financial advisers in the UK, placing joint third and advising on six deals.
The review looked at the most prolific advisers in the UK by the number of deals conducted over USD 5m, with Benchmark International placing above firms such as Morgan Stanley and Goldman Sachs.READ MORE >>
Benchmark International is delighted to announce that it has been named by SME News as ‘Best for Acquisition, Growth & Exit Strategies 2018’ in its UK Enterprise Awards.
Part of AI Global Media, the international provider of corporate news and information, SME News produces quarterly publications with the latest news, features and deals across the UK SME landscape.READ MORE >>