Who dares...

By NATASHA MUKTARSINGH
Updated:

 

BUYING a business might seem an unwise move when war and economic uncertainty are in the air. But smart business owners are looking for carefully targeted acquisitions that will quickly benefit from economic recovery.

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A study from accountant Grant Thornton shows that mid-sized firms are not being put off buying. David Ascott, a corporate finance partner at the firm, says: 'If you have the financial resources, this is definitely a good time to buy and there are a lot of entrepreneurs around at the moment looking for companies to buy at the right price.

'But it is important to have a clear business plan showing how a new business can be integrated with your own. Look for cost savings that could be made, new products that fit with your business and ways of increasing the customer base. But make sure you also identify the risks.'

Rob Donaldson, corporate finance partner at accountant Baker Tilly, says: 'Now is a great time to buy because prices are down and some vendors are being forced to sell. You might find targets at half the price you would have paid a couple of years ago and you can buy companies cheaply out of receivership.' Buying a new company could give business owners a chance to make cost savings or take a competitor out of the market.

Donaldson says: 'It is a chance to leapfrog into a stronger position and this climate won't last forever.'

After a management buy- in 18 months ago, Chris Jessop became chief executive of Sona, which provides fitness facilities for large companies such as HSBC and Glaxo SmithKline. His firm, based in Chiswick, west London, has since acquired three smaller companies and is looking for other targets to expand its £9m business.

Chris, 49, says: 'As

well as carrying on with our plans for organic growth, our strategy is to diversify into a range of wellbeing services that fit with our existing business, such as physiotherapy, personal training and massage.'

He expects that the three businesses he bought last year should boost Sona's strategy for growth. 'The climate for buying is better now than it was a couple of years ago,' he says. 'In the late Nineties, company valuations were very high but times are harder and people are more realistic about price now. It is still a good opportunity for vendors to get some value from their companies and have the chance to be part of growing business.'

• Baker Tilly has a free guide to making acquisitions, which is available by calling 020 7298 3307 or visiting its website, www.bakertilly.co.uk. The firm will also hold a free seminar on funding acquisitions on May 20 in London. For more information, contact Laura Morrison Rees on 020 7413 5381.

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