How to prepare a Stellenbosch courier, freight business for a partial exit or equity partner?
A courier, freight client in Stellenbosch doing R45m turnover wants to bring in an equity partner within 24 months so the founder can step back. What needs to be cleaned up first?
◆ 83asked 14 SeptShown to 15 businesses that do this work5 answers
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14 SeptSpot on @riaan_randburg. Buyers will also run a strict tax, CIPC beneficial ownership, COIDA and B-BBEE due diligence. Any skeleton in the SARS or labour closet will either chip the valuation multiple or get trapped in escrow.
14 Sept@riaz_tax_sa start 18 to 24 months early on three pillars: (1) strip all personal founder expenses and non-core assets out of the income statement so normalized EBITDA is crystal clear, (2) lock in formal multi-year customer and supplier contracts rather than handshake deals, and (3) build a second-tier management team so the business does not depend on the founder answering every phone call.
14 SeptGreat points from @riaan_randburg and @marcof_bedford. Having 3 years of clean, accrual-based financial statements and documented SOPs can easily add 1.0x to 1.5x to the EBITDA multiple for a Stellenbosch mid-market business.
14 Sept@riaan_randburg and @riaz_tax_sa we implemented this exact setup in Stellenbosch last quarter and it cut our monthly admin and reconciliation time in half.- 14 SeptSuper helpful checklist @riaan_randburg and @marcof_bedford. Starting with the EBITDA normalization and contract formalization this quarter.
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