Your very own Andy Murray dilemma
Clearly I need to get out more. Watching Great Britain’s phenomenal victory over Belgium in the final of the Davis Cup got me thinking about a topic that often arises in deal-making – the overreliance of a business on one key, high performing member of staff. In GB’s tennis squad, that staff member is obviously Andy Murray. In this year’s competition he won eight straight singles rubbers – only the third player in history to do so. Murray, to his credit, is the first to celebrate this as a team victory. But the fact remains he personally helped secure 11 out of 12 victories – that’s 92% of GB’s points – across their four matches against the USA, France, Australia and Belgium. It’s unlikely GB would have won a first Davis Cup in 79 years without him. Do you have an Andy Murray in your business? Could it actually be you?
I ask because in some cases, perceived overreliance on the business owner or shareholder can actually kill deal negotiations. Today’s trade acquirers are risk averse, and will not want key players to walk out the moment the ink on the sale contract is dry. They will not want to feel that your company’s success is built totally around one or two key individuals – and if those individuals are shareholders… well, you can see their point.
Business owners regularly come to us for advice because they have been told “you are the business” – and need advice on their next steps. Even clients who have a clear succession plan in place often retain an active role, and hold key strategic relationships. How would we approach this?
The answer – as it is for many aspects of deal-making – is choice. The range of deal types and structures out there in 2015 is extensive: from share sales, to Management Buy-Ins, to securing platform investment. The key is identifying options, a range of interested parties, and discussing a range of appropriate solutions. 31% of our clients, for example accept some form of consultancy role with the business post sale. An increasing number are looking to stay and work alongside a new acquirer or investor – and many financial buyers are actively looking to invest in and support management teams. Wider options deliver better outcomes. And Andy Murray? Well, he’s just proved another golden rule of business: when you’ve got a competitive advantage, use it. I’d call that good management!
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