Capital Exits International Ltd is a boutique business broker, based in the South of England, with a world-wide reach. Capital Exits is made up of a small and highly skilled team that are all driven by market research, buyer trends and science. Following a string of business sales to trade acquirers and high net worth individuals (HNWI’s), we recently spoke to the CEO, Mark Venables, for some insight into what turns out to be a very niche position they fill in the M&A market.
Why all the buzz around Capital Exits and the acquisitions it has delivered on?
Mark: “Capital Exits engage with a low number of clients per year and we have a 98% success rate. Our success comes from being sector selective and only engaging with companies we are sure will sell”.
What is your company known for – and why is it serving the public better than many competitors?
1. We are a boutique business broker.
2. We engage with a maximum of 10 clients per year.
3. We only work with companies we know will sell.
4. We always give a free company valuation before engaging with a client.
In 5 years from now, what is your prediction and what do you aim for?
Mark: “Over the next 5 years, Capital Exits International Ltd will maintain its reputation for quality and not quantity”.
Tell us about any causes you care about?
Mark: “We love to support the NSPCC, this support goes back to my first charity event when I ran the 1998 London marathon. Since then, all of my entrepreneurial ventures have supported the NSPCC”.
What is your advise to people during times of adversity?
Mark: “During times of hardship, like the current Coronavirus Pandemic we are experiencing, it is important to remember that it will not last forever. Reflect of your past success and start planning for the future. Do not be afraid to take calculated risks, after all, that is how you got where you are today. The world is changing, embrace the change and move with it”.
What are the key trends and statistics that people should know about in your industry?
Mark: “Acquirers are always looking for well-structured and managed companies with good sustainable, year on year, net profit, a large diverse customer base and recurring revenue. Every successful business sale comes with a willing seller and a willing buyer.
Set realistic aspirations on deal type, size and time scale, and you will stand a better chance of succeeding”.
What is the most risk free way to structure a business sale?
Mark: “Gone are the days when a buyer would pay a high multiple with 100% cash on day 1. More common is a low first payment with the balance being paid on an earnout with conditions tied into growth and profit. This buying style minimises risk to the buyer.
To minimise risk to the seller, we advise shareholders to keep a controlling stake in their business and work over a pre-defined length of time, grow the business with the acquirer then exit. This type of managed exit gives the seller money on day 1 and a future, controlled, stepped exit from the company, in most cases, the financial rewards are greater at the point of the secondary exit”.