First impressions of EOT as an exit strategy
We thought, actually, [an EOT sale] seems the best of everything. We got offers from competitors, but when you get into the nuts and bolts of it, what does that leave behind for everyone else?
Particularly with the nature of our business, are [the staff] all just going to be made redundant? Is it just going to be an asset strip, where they take our customers and database, merge it into their own, and say “bye bye” to everyone who helped us get to the position we were in?
It didn’t seem particularly fair to say: “thanks very much employees – you’ve managed to help build up the business to the extent where we’re able to go and play golf, and now you’re left applying for your own job.” I’ve been in that situation a few times before and it’s not pleasant.
Additionally, with the trade sale route, the buyers focussed an element of the valuation on very short-term financial performance. This increased our risk – did we want our business to be valued on six months of post-pandemic sales, without the last 15 years being considered? In an EOT transaction, the Trustees can take a more measured approach to valuation based on a greater understanding of the business and a longer-term view.
It’s reassuring to know that lots of other companies are choosing EOT. One of my friends has a company that has recently gone through the EOT process, a large construction firm.