A trade sale of a business is a popular means of exit, often to a trade buyer operating in the same industry. The disposal typically entails a company's shares or assets either in whole or in part.
The acquisitive party may be a strategic buyer looking to grow their own business through market share acceleration, to expand regional footprint, or the addition of new services or products
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What does a Trade Sale involve?
Features of an Employee Ownership & other sale types
There are a number of benefits to undertaking a Trade Sale, including:
Case Study
Who: Herida Medical, a healthcare manufacturer of pressure care mattresses, acquired by leading European medical device company Winncare.
GS Verde Services: Corporate legal advice
Quote: "The acquisition by Winncare marks the start of an exciting new era for our business. Over the last few years, we have spent time appointing the right people and the right teams in order to grow and with the strength of Winncare behind us, there is the opportunity to escalate this further. I predict a very bright future for us in the pressure area care sector." - Sean Spencer, Herida Managing Director
Trade Sale Advantages
An exiting owner can create a 'clean break' if they are looking to retire or are embarking on a new venture.
The vendors often achieve the full value of the business on day one.
The acquirer is likely to be familiar with the business sector, which can make the sale process more efficient - They are likely to understand characteristic demands.
It can allow for an opportunity to stay within the business.
Joining two businesses in the same sector can increase collective market share, remove competition, and open up new markets.
Trade Sale Considerations
Marketing the business for sale and seeking optimal buyers can be costly and requires expertise.
If the transaction does not go ahead, it risks business information being more easily accessible to competitors.
As a reaction to the change in control, there is the possibility of negative sentiments from customers and employees, which will need to be managed
Selling your business involves several key stages, each of which requires expert and specialist advice. The GS Verde Group combines legal, finance, tax and communications services, working as one to form a complete business sale advisory team working to achieve the result you are looking for.
As deal-making experts offering all the necessary expertise under one roof, we help you navigate the journey from pre-sale preparation through to successful completion.
Constructiv Clothing, a Wales-based and family run clothing company, has successfully completed a succession sale, in a deal advised on by GS Verde Group.
GS Verde Group were pleased to advise Yard Data on the sale of its business to data analytics and implementation specialist Koios Consulting.
When planning the future of your business, and the steps needed to achieve your goals at the time of sale, it is important to have a clear and concise action plan.
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