Achieving a sale through private equity investment

Private equity investment has become an increasingly popular way for ambitious management teams to secure investment for business growth.

But it can also be an effective route for a business owner to achieve a partial sale and ultimately an exit from the business. Here are some top tips for exploring a private equity sale.

Do your research

Do potential PE investors understand your market? Have they made similar investments and successfully added value to similar businesses in the past?

Demonstrate the value in your business

It’s important to remember that private equity investors are financial investors, and their decisions are based solely upon their projected return on investment. They will want to acquire the business on the right terms and, crucially, at a price which will allow it to achieve its target returns.

Be clear about what you want

Private equity investors are financial investors, and their decisions are based solely upon their projected returns

It’s advisable to have both a good indication of the value of your business, and someone to represent your interests and negotiate on your behalf, before embarking upon any potential deal.

Build a strong management team

Business owners looking for PE investment for a partial buyout should be aware that a deal may involve relinquishing control. PE investors will usually want to work alongside a properly incentivised management team to develop and improve the operations and financial performance of the business. While they may be sensitive to a business founder’s wishes, their primary concern is ultimately to provide a return to their fund’s investors.

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