A good financial advisor is crucial to helping an agency embarking on the long and complicated process of selling, according to PricewaterhouseCoopers partner Malcolm Preston.
During a business session on Buying and Selling A Travel Business, Preston said: “You need to ensure you have got an advisor who can get the best possible price for your business.”
Port Philip Group’s former owner John Kennedy, who sold his company to Thomson Travel Group, agreed. “It is absolutely critical. There is a lot of money to be made or lost through getting the right advisor. My choice helped me get the best deal,’ said Kennedy.
He added: “Find someone who you are comfortable with and can push your side of the deal. They have got to have the endurance and determination to see the venture through.
“We went into final negotiations at 10am one day and tied up the deal at 3am the following day.”
Sellers should also be prepared for due diligence. Preston said: “It can be an unpleasant and stressful experience and sellers should make sure they are ready for it.”
Travel agents and operators should also ask the question whether they want to remain in the business if they go ahead and sell.
“If you decide to leave the firm when it is sold it could detract from its overall value. If there isn’t a good management team in place then you should develop one,” said Preston.
The seller should also clarify whether the buyer wants to keep the existing team running the business or port across their own management team.
He urged sellers to make sure they had good growth prospects which could be demonstrated to potential suitors.
n The number of UK travel companies sold rose from 10 in 1996 to 26 in 1999.