The Path to Acquisition: The Role of the Accountant in TouchByte’s Growth Journey.
In early 2023, TouchByte was acquired by SALTO Systems.
Many founders reach the stage of a sale with a limited understanding of the journey they’re embarking on. Ally Allington, partner in the Truro office of Bishop Fleming, shares her extensive knowledge on the process, and describes what business owners should consider when deciding on the right exit for them.
Bishop Fleming is an independent leading provider of audit, accountancy, tax, and advisory services in the UK. From owner-managed businesses, SMEs, and large businesses; to entrepreneurs and private individuals; Bishop Fleming has a wealth of knowledge and experience in areas such as internal and external audit, corporate and personal tax, corporate finance and deals and accounting services.
For the founders and business owners who are considering a sale, what are the most important qualities to be searching for in their accountancy team?
“Firstly, this is an area where experience really counts. Often there is an imbalance between buyers and sellers; most founders will only sell a business once, whereas buyers can be experienced, serial, acquirers. This means it is very easy for founders to lose value without even realising it, for example, in technically complex areas such as normalised working capital negotiations,” says Ally.
“Similarly, few founders understand the concept of completion accounts let alone whether they should be pushing for the use of a locked mechanism instead. Advisers with a superficial understanding of sale processes simply won’t have the requisite experience to provide meaningful support.
Personal rapport is probably the next most important consideration. A sale process is an intense project that may last the best part of a year, so it helps if you like the person guiding you through it! This can be difficult to judge at the outset, but taking up opportunities to speak to a selection of their former clients is a good starting point”.
Are there any other company values at Bishop Fleming that come into play during the sale process?
“Yes! As a firm, we are immensely proud of our 100+ year history, and this is only possible by consistently being true to our values. Perhaps what’s key in this context is putting ourselves in the client’s shoes at every opportunity. We understand this can be a stressful time, and our absolute focus is helping founders navigate through what is normally a life-changing event. It isn’t just “off of the shelf” advice. It’s very specific and relevant for each business we work with. It’s about having honest and meaningful conversations.
“At Bishop Fleming, our values aren’t just posters on the wall. They really reflect in how we operate.”
When a founder approaches you, ready to start planning their exit, what are the next steps?
“The first step is always to understand what they mean by ‘exit’ and what they want to achieve. All too often, founders believe an outright sale is the only option, whereas there may be other solutions that better deliver against their objectives. We help them understand all the options open to them and then work to build a strategy to deliver their preferred solution. Careful planning is critical as rushing into an ill-conceived process rarely delivers the desired outcome. Sometimes, that can be a quick process, but in other cases we may work with a founder for many years in the lead-up to their ‘exit’.”
What does a corporate disposal look like from Bishop Fleming’s perspective? What are the core stages that a founder should prepare themselves for?
“Although no two sale processes are the same, the work broadly divides into a planning and an execution phase. The planning phase seeks to position the business optimally before marketing it to a pre-identified pool of buyers. Founders typically underestimate the time and effort needed in this phase. And, often it will be first time someone independent of the business has asked difficult commercial questions to the founder, which can be unsettling, given they are understandably proud of what they’ve built. This process is critical to ensuing the business is positioned in a way that will maximise its appeal to buyers in due course. The execution phase actually comprises a number of separate workstreams, including the approaches to buyers, due diligence, detailed negotiations and a closing phase during which the legal documentation is agreed. Typically, founders are surprised by the intensity of this phase and how the many workstreams come together. But your advisory team will guide you through this process and, if you selected them correctly, it’s unlikely there will be anything in this phase that they have not seen before.”
Finally, what mentality should a founder bring into this process?
“An open mindset! Inevitably complications will arise, timetables may slip, and frustrations will occur. But it’s important to remain focussed on the overall objective of securing a sale on the terms you want. Looking back retrospectively, many founders say they learned a lot about their business over the course of the project. But, few would say they enjoyed it at the time. Never lose sight that you have a business to run alongside the sale process itself!
It can be really disconcerting for founders to try and sell their life’s work through a process they have little knowledge or understanding of. But, investing the time in building an experienced team of advisers around you whose judgement you trust will lift the burden massively.”
Jeremy Sneller, the Managing Director and co-founder of TouchByte, now a SALTO Group Company, said: “Our acquisition wouldn’t have been achieved in such a timely manner without Ally and the Bishop Fleming team. The role that the team played in streamlining our acquisition was integral to our success. We highly recommend Bishop Fleming’s services to any fellow founders who find themselves ready to take the leap into an exit.”
As a company who have recently completed this process with great success, we must highlight the importance of finding the right team. Bishop Fleming, alongside Murrell Associates, were certainly the right fit for us, and we couldn’t have asked for more.
For any enquiries to Bishop Fleming, find them here:
Phone: 01872 275651
Direct Email to Ally Allington: aallington@bishopfleming.co.uk
Address:
Chy Nyverow
Newham Road
Truro. TR1 2DP
