How We Fund a Company Takeover for You

 

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So, how does a fully funded takeover actually work?

Building your brand through acquisitions is a process. Our 30CEOs programme is designed to take that process and manage it through. The key of course, is funding the deal. We’ve taken care of that too. In fact you could take over a business taking little if any cash from your existing company. Here’s how it works…

Ok, let’s assume that the business you want has an asking price of £1,500,000…

It is rare that an acquiring company (in the SME space) would have funds available for an all cash buy. Owners know that if they really want to sell, they need to negotiate.

Our first step (at Nudge) is to work out a realistic valuation range of the company and to talk to our funders about the acquisition opportunity. We look at your business (from a financial perspective) and the funding that could be made available for the purchase from them on close of the deal.

Assume that after valuations and discussions, £1Million is a fair price and the seller agrees to that figure.

Now let’s say that the Nudge team, working with our funding partners have agreed to finance the deal at £350,000, a business loan to acquire the company – We’re on the way, but £750K short.

So, we know the asking price (£1M) and we know how much money we have to negotiate with (£350K). Our next step is to meet with the sellers on your behalf (you’re welcome to attend of course) and to negotiate a deal that works for them and for you.

In this scenario,
here’s the deal we worked out for you.

The seller agrees to sell the company to you for £1,000,000.

He agrees a to a payment over a three year period (perfect for our 30CEOs programme).Starting with a £250,000 (25%) payment on close.

Now, this is important. With the right guarantees in place, the seller’s funds are assured, so he is happy to make a deal whereby he is paid a figure on close and a figure each year (though it could be quarterly or even monthly) until the payment of £1m has been settled.

For you it means that you can make future payments out of the cashflow of the business. Yes you will have a debt on the business for a three year period, but once the debt is paid down from future cashflow, you own the business outright as an asset of the business (and a massive bump in your exit valuation).

So in this scenario, the seller agrees to an initial handover payment on the day he passes the business to you for a sum of £250,000.

You will be paying that amount (£250K) out of the £350K funding we have arranged (so you will still have £100K for cashflow).

Furthermore, the seller agrees to the next payment falling due, also £250K, in 12 months from now. And the same for the next two years after that. This sum comes from the money the new company generates. No loans required (but of course a lot less profit until it is paid down).

You will already know from the financial due diligence undertaken by us initially and by your FD or accounting advisors that the business can handle a debt repayment of £250K per year for the next three years.

Remember too that you will be making economies of scale. For example, just taking out the current owners’ salaries from the outgoings of the business will go a long way to paying down the debt. Add to that reduced headcount savings by merging the (eg) accounts manager role and you’ll see that with some planning, the business will be easily affordable.

So, we meet up to close the deal. You pay over the first (£250K) payment from your funding. You now own a £1,000,000 business having paid for it with a mix of funding and deferred payments

The business you are acquiring was able to secure £350K, enough to pay the first part of the deal. Now, future payments come from the business itself.

Once that business has settled down, together you and I will start to make plans for the next acquisition.

Our Finance strategist Nicola Morgan is a UK Accountant. She will work with you and your team to make sure the numbers add up. Nicola evaluates the strengths (or otherwise) of opportunities to determine viability before we send the opportunity to you, meaning you don’t waste time on deals that are unlikely to work out.

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Learn About The 30CEO’s 3 Year Acquisition Programme

The 30CEOs programme is the fastest way to acquisition success. Our team of takeover specialists become your team and for three years we work with you to find, fund and takeover strategic businesses to build your brand.

What problem are you solving for me?

Acquisition is the fastest way to build the value of your company and a plan of regular strategic acquisitions is very possible. But, it takes time, skill and patience (as well as a lot of money) to build a team in-house.

Also, joining 30CEOs takes away your commitment to high overhead. It takes away the recruiting, onboarding and training of dedicated staff to help with acquisitions. No holiday or sick pay, no office space or pension plans. It means you have an instant team working with you to find the deal, to analyse and to fund it. You deal directly with my small team of specialists.

I like to think of myself as your co-pilot, navigating the way forward for the next three years.

What are the joining rules?

I think it goes without saying, you need to be committed to this for 3 years. yes you can hit the pause, you can even disengage whenever you wish but the three year programme is designed for maximum growth.

Financially, your income must be past the 500K mark. Why? because funders will look at your existing company revenues, even if all (100%) of the takeover is funded. They will need to be sure you can cope with the new acquisition. 500K is usually enough to make it happen.

We can talk this through on the call.

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Are Nudge Business Brokers, Consultants or Deal Makers?

We’re a mix. We do follow some of the general principles of both brokerage and M&A, but our focus is on working with a small number of clients whose businesses we truly understand, that way we can recognise opportunities for you. We work closely with you in an advisory capacity too (ie consulting).

Also, we are very pro-active in getting out there and finding the deals for you. That often means we talk to CEO’s who are not actively in the ‘sell’ market until we talk to them and put a proposal in front of them., so yes, we’re deal makers too. All in all, we prefer to be thought of as your acquisitions team, an integral part of your growth and exit plans.

Tell me the ‘short story’ of what Nudge is proposing
with the 30CEO’s programme?

Over the next 3 years, we will research the market and find suitable acquisitions for you. Our team of researchers will use our connections worldwide with brokers (thousands), Accountants, Lawyers, networks, professional organisations, on LinkedIn, by direct mail, social media and of course good old email to connect with companies that fit your ‘dream deal’. We will connect to owners interested in selling their business and (once we know it’s of interest to you) negotiate the price.

From a finance viewpoint, we will negotiate closing payments, earn out payments and deferred payments with the owners. Our aim is that the financial structure we come up with means there is often little if any upfront payments required from you to take ownership of the company.

But, let’s be clear. A no cash deal is not always possible. Sometimes the funding partners for the deal will make an ‘equity call’ meaning they will ask for a payment contribution from you, the buyer. Of course, if that equity call isn’t realistic, we walk away from the deal and on to the next one that does fit. You are always in control.

30CEO’s Programme Head Jamie Sylvian was a Joint -Founder of a small marketing agency called Sira. That company became Uswitch.com, sold for £200,000,000 in 1996. He was also Founder and the Creative Director at MarComms agency Nudge Agency before transitioning to helping CEOs buy creative businesses. To you it means we know a good company when we find it.

How much do I pay Nudge to make this happen?

30CEOs is a membership structure. There are two payments from you to us. The first is an annual fee of £22,577 (+VAT) as a membership fee. The fee pays for overheads, whereby the Nudge team undertakes the research, analysis, negotiations and funding work we do on your behalf in each deal.

The second payment occurs only when we have successfully sourced, negotiated, funded and handed over a business to you. At the close of the deal, we charge a 4% success fee on the total value of the deal. So for example, in the £1,000,000 deal in our example we would bill you for £40,000, payable at the close of the deal. This fee could come from the additional funding (there is £100K leftover remember) or from your current business as a consultancy fee.

You can disengage our services at anytime. However keep in mind that once you do, the next company on our waiting list will be offered the available space, so getting back on board my take time. I suggest that you maintain your membership even while not in acquisition mode. The comparative costs of membership is very low compared to deal values we will be helping you achieve. But as always, it’s your choice, you are in control.

Go Here to Register Your Interest

Where is 30CEOs / Nudge based?

We are an international company, with staff in London, Europe (Bulgaria) and in Asia. We are working with acquisitions and sales projects worldwide. Nudge is a brand name of our parent company Bluenote Ltd, registered in Bulgaria. Why Bulgaria? – As we move towards Brexit, our company may choose to operate both in the UK and in europe. Bulgaria is the lowest tax rate in europe (10% corporation tax) it makes sense to use the lowest tax jurisdiction for our business, with satellite offices as required. Our Founder Jamie Sylvian is London based. Our english language support and research team are managed by Jennie Southern in Bulgaria.

30CEOs is a 3 year acquisitions programme devised by Nudge M&A,
the London based creative sector acquisitions company

Hello, we’re the Nudge 30CEOs team
General Enquiries

Jennie
General Manager

Hey, I’m Jennie Southern. My official title is General Manager, but around here they call me The Queen of Everything! – Working out of our ‘Office in the Mountains’ in the All Seasons Mountain Resort of Bansko, Bulgaria, I keep the wheels rolling at Nudge, making sure deals our team are working on are going through, which means liaising constantly with company owners, business sellers, brokers, financiers, lawyers and accountants. I’m also responsible for managing the deal flow for Nudge partners and taking care of our team, currently spread across four countries. I’m based in our Bulgaria office but you can connect with me using the London number. When I’m not at work, I’m a keen cook and crochet demon. When I’m feeling a bit more energetic, you’ll find me up in the mountains, less than 5 minutes from our office (it’s an awesome view from my desk!) as I’m a pretty good road cyclist (Summer) and skier in the winter. Oh and most importantly, I cook a mean shepherd’s pie.

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email:jennie@nudge.ltd

Phone:+44 (0)20 3 865 8155

Financial Enquiries

Nicola Morgan
Finance Manager

Hi, I’m Nicola Morgan. I am the finance strategist here at Nudge, otherwise known as the numbers ninja. As a (UK trained) accountant, I’ve been in finance for over 10 years. At Nudge I take care of deal analysis and funding strategy. From my base in the amazing Philippines, I work with accountants and brokers to ascertain values and then connect with funders to create funding structures for business acquisition. In my spare time, I am an avid traveller, so much so that I spend half the year working out of Asia. I am also a keen snowboarder when I can get to our mountain office in Bulgaria every winter. Oh and I like long walks on sandy beaches, but then who doesn’t?… You can connect with me through our London office by phone, or set up a conference call and of course, by email.

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Email:nicola@nudge.ltd

Phone:+44 (0)203 865 8187 Choose Option 3

Strategist

Jamie – Founder, London


Under that swish looking cap is me, Jamie Sylvian, Founder at Nudge.

It’s not often you get the chance to mix your passions. I enjoyed my time (23 years) in the creative business. As a copywriter, I worked on some amazing projects. as a trainer in sales communications, I travelled the world and shared my experiences. The cut and thrust of deal making though has always been a passion. Honestly, it does not feel like work. Finding a creative company that fits like a glove to another, and making that deal happen is a real buzz.

Importantly, I connect with CEO’s and Directors of creative companies, I’ve been one and I know the mindset. That gives Nudge an edge over general brokers. We see ourselves as partners in the process. Importanly for me, I like creative people, they are open to ideas, suggestions and new approaches, that helps.

My experience in the creative sector.

For 23 Years I worked in the marketing and comms world, helping businesses in the UK, Europe, USA and Asia launch and develop sales and marketing strategies. My role has been to dream up, test, adjust and roll out new strategies. Some failed of course, but enough succeeded in developing new businesses, new product lines and new services for me to make a name as a ‘go to’ strategist and communications writer for companies like Haymarket publishers, Civil Service Magazine, PR Week, Casey Research, and Campaign as well as hundreds of SME’s in the UK, Europe, Asia and the USA. A 25+ year journey of ideas and strategies.

My first experiences with M&A

In 1998 I was the joint-founder of Sira Utilities the company that became Uswitch.com, sold for £200,000,000 in 2006. After that I spent 19 years as a consultant and growth strategist, living in Hong Kong, Bangkok, Chiang Mai and in Europe, London, Spain and Sofia, writing (my passion) sales and marketing campaigns for my own agency, travelling, investing passively and enjoying life’s great adventure.

As a Creative Director at my agency (www.nudge.agency) I  worked for some of the world’s largest publishers and gaming companies and I write sales copy for Campaign Magazine which is the iconic trade publication for the creative industry (i.e over 70,000 of my competitors read my work every time I write a campaign) and my work also relaunched Civil Service World Magazine in London 2016. I have written copy and marketing campaigns producing over 300 Million Dollars worth of product sales.

In the M&A space, I have merged my passion for the creative process with a dedication and mission to help build creative portfolios for Nudge clients. I have put together a team to get the job done. (more here)

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Email:jamie@nudge.ltd

Phone:+44 (0)20 7 078 4118

Operations

Ciara – MD

Hey, I’m Ciara, I’m the Managing Director of Bluenote Ltd, Nudge parent company. My role is to oversee the entire nudge business, overseeing the day to day of the business. My thing is organisations, spreadsheets, calendars, that kind of thing. Hobbies, biking, salsa dancing, travelling and skiing. I also take care of our charitable events, like the Bansko Ball every Christmas and I’m the Chairwoman at Sunflower, a charity sponsored by Nudge near our ‘mountain’ offices in Bulgaria.

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email:ciara@nudge.agency

telephone:+359 (0) 890 311 637


We are creative sector acquisition specialists, guiding 30 CEOs from across the Creative Sector on a 3 year growth through acquisition strategy to transform their agencies into Super-Brands.

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