Business Exit - Management Buy Out'
Sunday Business Post
by Dermot Grant, Managing Director, Origin Corporate Finance.

The technology sector mentality has raised awareness and focused attention on finding an exit from a business, says Dermot Grant of Origin Corporate Finance. The dynamics of business are ever-changing and many entrpreneurs now take a more short-term approach to their business.

Grant is cautious but positive in his appraisal of the situation. "It can be good for business, introducing new blood to take it to the next level, bringing a new vision and new focus," says Grant.

Given that his company offers specialist advice on exits, the rise in their popularity must be encouraging for Origin's own business prospects.

"Everyone who has ownership or part ownership of a business will from time to time ponder their exit. The key to achieving a successful exit is to plan for it. We provide a service to people who wish to retire ot sell their shares either now or in the near future and want to implement a plan."

"This is something that can and should be put into place well before you actually decide to exit" says Grant.

According to Origin Financial Services, the key issues governing an exit plan are:

1. Retirement

You may wish to sell your business to a third party or indeed consider your management to be the obvious purchaser. You may want a gradual retirement which could involve partial disposal with full disposal later on.

On retirement, there are a number of issues - for example, retirement relief - to consider in order to minimise tax liabilities. Consideration should also be given on whether or not you are disposing of your shares or the assets in your company.

Other tax saving issues to consider are pension contributions or golden handshakes to minimise the overall transition tax.

2. Shareholders agreements

Structuring of shareholders agreements, option agreements, option agreement, put on call arrangements etc. This will provide acquisition mechanisms for your fellow shareholders that can provide for your exit.

3. MBO's

Should you consider encouraging your management to complete an MBO? Sometimes your management team might be the only potential buyer in town.

4. Going Public

While high value flotations in the technology and dotcom sector have eased off, it is still the route to take for established technology or global services business.