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Newsletter, Volume 16 | January 2020

Welcome back, I wish you well for 2020 and the new decade too.  I am sure that you, like us, are looking forward to a busy and prosperous year.

I thought I would take this opportunity to update you on what has been happening at Deal Leaders Africa:

Our Year 2019:

During the 2019 calendar year, we signed up 20 new clients. Yes, this is a reduction on the previous year, but the reason is that we have chosen to cut down on the number of clients we take on. We have taken this step in order to make absolutely certain we have the capacity and skills to deliver on our promises. The average turnover of these clients was R226 million across the following sectors:

  •          Industrial / manufacturing – 5
  •          Software / Fintech – 3
  •          Distribution – 4
  •          Retail / Product – 2
  •          Construction – 2
  •          IT / Technology – 2
  •          Logistics – 2

Many of the deals we worked on during 2019 are concluding over the next few months, totaling an expected deal value of R736,000,000 across 7 deals before the end of March 2020.

Product refinement:

Following considerable feedback from previous clients, we have restructured our core product to better meet the needs of our current and future clients, focusing on enabling them to better understand the value and saleability of their business before they make the substantial decision of taking it to market.  As such, our service has been structured as follows:
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  • Saleability and Market Assessment (SMA):
    • A comprehensive exercise that includes a business analysis, a valuation exercise and an acquirer analysis. Most clients continue with market engagement after this process, but some choose to pause as they use our assessment to refocus their business.
  • Market Engagement:
    • The process of finalising marketing documentation and the list of prospective acquirers, plus the pro-active process of engaging the market, meeting prospective acquirers and motivating for offers.
  • Deal Negotiation:
    • Deal finalisation, Term Sheets, Due Diligence and Conclusion.

The big change is, of course, the SMA. The best way to understand this service is to compare it to the traditional business valuation route which many business owners follow when they consider a sale. They would usually approach an accounting firm to do a valuation of their business, which is both limited in scope, costly and very restricted in terms of the additional value it offers the shareholders of their business. With our SMA you can now get a cost-effective, detailed and in-depth analysis of your business and a clear acquirer strategy, so that you will be in a more informed position regarding the sale of your business, if you opt to take that step.

The kinds of questions that are answered through his process are: Will you need a growth partner? Do you want to sell? Or do you just want to take that first step towards an exit – with the power of knowledge and information on your side?

The reaction to our new SMA offering has been very positive. The feedback we received from our December newsletter in which we introduced this convenient new service proved to us that it fills a gap in the market that has, until now, been overlooked.

Please do not hesitate to make contact with me by clicking “Book some time with us” below, should you wish to engage further. I am always happy to have face to face meetings to help business owners understand the saleability of their businesses and to refresh their understanding of how we can assist them.

In closing, I hope you have a profitable January. Our February newsletter will contain interesting news and feedback from our conference about the tax implications of M&A transactions, which we are hosting this month.

Until then, all the best.

Regards,
Rick Grantham

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