hgkc invited to co-host Exit Planning roundtable with HR Dept

Following our appointment as partner for exit preparation and planning to the HR Dept, we were delighted to be invited by Albert Keeshan, licensee for Reading, Thames Valley and South Oxfordshire, to co-host a round table on exit planning for several of Albert’s clients.

The round table took place on the 24th November at Albert’s offices in Theale, and Peter Quintana was joined by Joel Dunning, Director of GS Verde Group, with whom HGKC collaborate for the legal and financial aspects of an exit.

hgkc round table discussions, held under Chatham House Rules, are based around two key questions: how do you value a business, and how do you prepare a business for exit? However, the detail is always set by the attendees, as the questions and points they raise relate to their specific circumstances.

Joel opens by offering a preliminary answer to the first question, quoting national averages and GS Verde’s experience. The base unit for valuation is EBITDA (earnings before interest, tax, depreciation and amortisation) but the EBITDA ‘multiplier’, which is a guide to the amount somebody is prepared to pay, and which typically is an indication of the buyer’s interpretation of risk and their expectations for showing a return on their investment, can be affected by numerous elements. Industry sector and size are tangible and easy to establish, but less tangible components – the capability of the management team, how new business is generated, and growth potential, for example – can be deemed to present a risk to the future of the business and will cause a buyer to offer a lower multiple.

These more intangible areas are where the 2nd question comes into play, and where hgkc specialise in the work they do with their clients. Peter’s initial response, illustrated form hgkc’s experience with clients and Peter's own experience during his career, covers three key areas: the owner’s mindset (are they really ready to let go of their business?), the ability of the management team to run the business without the owner in it, and closing the expectation gap, i.e. the difference between what the owner would like to realise for their shares and the estimated valuation.

The discussion in Theale focussed on EOT (employee ownership trusts), whether there was a need to switch from a freelance workforce to employees, ways of exiting other than through the sale of shares, and how to present a business in the best light for a prospective buyer.

Albert said afterwards: “Five of my clients attended the round table, and all found the session invaluable at their various stages of considering their exit strategies.”

All attendees said they would recommend the event, describing it as “very informative". One was surprised - and relieved - to learn that there was a different route to exit than the traditional 'grow to sell' advice that they had previously been given.

hgkc and GS Verde ran several round tables together in 2024, and are planning more in 2025. If exit is something you are thinking about, then please reach out to Peter directly on peter.quintana@hgkc.co.uk to register your interest in attending, and he will be in touch once dates are finalised. Alternatively, or book an online consultation with Peter here.

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