Business sales are up

Despite inflationary headwinds and interest rate escalation, there’s movement in the business sales sector with investors and established entities on the business acquisition trail.

Nationwide transactional data for Bayleys points to some quiet reinvigoration within the business sales arena and is evidence that New Zealand is emerging from COVID-related sluggishness, according to Jayson Hayde, Bayleys national director business sales.

“With borders fully open and some sense of normality returning to daily life, activity has lifted on the business investment front,” he said.

“Listings are up around the country as business owners make decisive plans, there’s renewed market confidence from buyers, and banks are looking favourably on businesses that have navigated the pandemic’s rocky road.

“Deals are being done with Bayleys’ business sales team brokering and concluding some significant transactions, with market premiums achieved in some instances.”

With shifting playing fields finally firming, Hayde said reflecting on the last couple of years is both heartening and sobering.

“Strong businesses that have made it through the turmoil are to be applauded, but equally, many other seemingly good businesses simply could not weather the storm.

“Extended government intervention which effectively removed trading autonomy from business owners ultimately took its toll on a number of businesses, despite staunch attempts to keep things going.

“Yet, even during the height of the pandemic here, there were motivated business sellers and buyers prepared to take a punt on uncertainty, but the banks weren’t willing to fund at that time.

“Lenders are now prepared to finance businesses that have a demonstrable track record and clear growth plans.”

Hayde said throughout the past couple of disrupted years, Bayleys’ business sales team has been able to offer business owners and prospective purchasers timely, relevant, and transparent market information, and identified sale pathways.

“We were able to provide value indications, assist in getting businesses ready for sale, guide buyers in completing due diligence, and offer creative deal structures.

“Vendor funding was facilitated, company shares changed hands rather than assets, and confidence was instilled around intellectual property transfer.”

Bayleys’ business sales team has expanded since 2020, with experienced and astute brokers with strong business backgrounds bringing new perspective to the table and broadening its service offering, said Hayde.

“We’ve boosted our capability and continue to leverage off Bayleys wide network and its full strength commercial team which has been very active across the office, industrial and retail segments of the market throughout the pandemic.

“It’s the connections that are paramount here and we have fostered great working relationships with investors, funders, parties looking to grow their asset portfolios – and even groups looking to take over leases on well-located premises.

“Although business goodwill may have been eroded through the pandemic, plant and equipment still has tangible value and, if the business premise space is optimally-located, the value of an active lease can’t be underestimated.”

In giving kudos to business owners for dismissing fear and making decisions that are best for their business and teams, Hayde accepts that staffing and capital flow will continue to challenge the sector.

“However, the government’s recently revised migrant investor visa settings requiring $5 -$15 million of investment with at least 50 percent of that required to be invested 'directly' in businesses rather than more indirect or passive investments, is evidence of some green shoots.

“Incentivising high-value migrants that have international expertise will help New Zealand businesses thrive and could speed up the country’s economic recovery.”

If you are keen to explore options for your business strategies, or create a robust business plan, contact Jayson Hayde - National Director of Business Sales today.