Sale of R&D Funding & Tax Relief Advisors
A relatively young 5-year-old business with a proven track record of strong year on year growth, this company specialised in securing government R&D funding for businesses in the SME space.
Based in south-east UK, the owner had built a well-spread client base, sustainable growth through an expanding network of referral partners and unique means to market. This coupled with a highly process driven organisation and low cost base, made for a very attractive acquisition opportunity.
For a full description of the business, please click here.
This was truly an exemplary business and an excellent example of How to build a business worth multi-millions in 3 years?
The majority shareholder (vendor) is a well networked, serial entrepreneur and had started the business with an eventual exit in mind. Hornblower met with the vendor in 2016 several years prior to marketing the business for sale. At the time, the business was still quite small scale with a £570k revenue. However, we advised on the current valuation and then what performance metrics would need to be achieved to obtain the valuation that the vendor desired.
Jumping forward 3 years, the vendor came to us having reached £1.8m revenue in the last trading year and forecasting £2.4m for the next year. A strong general manager was in place, along with clear business processes so that the firm was able to run alone with its 16 employees without direct input from the vendor.
Annual growth was over 30% with recurring/repeat business representing 40% of overall revenue. The business was now well poised for a successful sale.
The company presented an excellent opportunity for a business advisory and/or accounting firm to acquire a profitable and growing new revenue stream, with management capability in place and a solid basis and market for growth.
What Hornblower Did
Hornblower was first able to target its large database of potential buyers in the business services, advisory and accounting sectors, as well as investor groups.
Within 3 months, we had generated over 65 enquiries and assessed the funding arrangements of the most viable. We then led the meetings between the vendors and the top potential acquirers through which we determined the parties with the best all-round match. We obtained for our client over 5 leading and competitive offers, however in the end the prize went to Ernst &Young (link to press release).
Our Business Sales and Acquisitions Consultant, Sian Murray, led and managed the entire sales process from initial meetings with the vendor through to negotiating final offers and agreeing ‘Heads of Terms’ with the preferred bidder.
Contracts were exchanged after just 10 months for a sale of 100% of the shares, with completion 2 months later.
SOLD – March 2020