Renowned business broker Mark Mills is embarking on a campaign to encourage more UK companies to make themselves available for sale to domestic buyers. Recent figures from the ONS UK Economic Accounts show British businesses are hoarding over £334bn in cash which could be used to buy UK SMEs and boost the economy. In response Mills has launched Activate, a network of UK entrepreneurs who have already exited their own businesses, to encourage the sale of more British businesses.
Mills believes that UK business owners need better information to encourage domestic business sales to allow business owners to take advantage of the UK’s current Entrepreneur’s Relief, which allows company owners to sell their businesses for up to £20m and only pay 10% in Capital Gains Tax. UK public companies are finding organic growth more difficult to achieve, citing acquisitions as the way forward to expand their businesses and large cash piles readily available to purchase companies with
The latest ONS statistics have revealed that more British businesses were being sold to foreign companies in the last quarter with the value of acquisitions of UK companies made by foreign companies in quarter two 2013 increasing sizeably from £3.5 billion in quarter one 2013 to £23.4 billion helping to drive values higher and brining competition into the marketplace.
Activate will help unlock more domestic business sales, specifically to keep employment in the UK and to assist with the balance of trade deficit. Mills sees the Activate network as being the first step to unlocking the hoard of cash stored in UK business bank accounts, as part of a bid to create a more dynamic environment for UK business growth.
Mills believes “Businesses should take advantage of the once in a generation opportunity of a mountain of cash being available coupled with a record low rate of tax, which I believe will change at the next election in May 2015. It is poor use of capital to hoard cash when Bank of England Governor Mark Carney has reiterated his forward guidance of low interest rates for up to three years. Growth by acquisition will help UK plcs to continue to grow in their targeted markets.”
“British businesses need to realise that foreign buyers are not the only option and when more UK businesses go up for sale, there will be a greater opportunity for British companies to buy them, expand them and ultimately increase UK profitability, job creation and wealth.”
Mills continues, “My experience has shown me that there is no shortage of buyers looking to purchase home grown companies. The demand from UK buyers is there and the UK’s current Entrepreneur’s Relief provides a low rate of 10% for the owners on the sale of their businesses. Business leaders often don’t realise how much they could get from a sale, or simply don’t have the time or resources to prepare, that’s where Activate can help.”
Activate seeks to work with UK companies to increase their efficiency and profitability ahead of a sale and find a complementary buyer on supporting British companies looking to be sold by using Activate’s forty step pre-sale programme “If you want to achieve real strategic value for your business, you need to undertake the preparatory work before you put it up for sale, or you will find the price being reduced as the sale process drags on. As business owners are busy growing their business, our simple process can be followed and implemented with the owners whilst they continue to drive the company forward and as a result, a higher price is normally achieved for the business”
Mills has built and exited five successful businesses of his own including Cardpoint Plc, founded in 2000. Cardpoint Plc was valued at £170m when Mills sold his stake in 2006 and has recently been sold to US firm Cardtronics. Mills is offering to talk to any business owner at no charge on his free advice line 0800 080808
For more information visit www.weareactivate.com