There are bright spots in the market for business sales but vendors are still holding out for ‘inflated’ prices, according to industry participants.

There are bright spots in the market for business sales but vendors are still holding out for ‘inflated’ prices, according to industry participants.

Stuart Harrison, a director at The Corporate Finance Group, says, ‘In general vendors are still looking for inflated sales prices, and price expectations are still unrealistic.’

Doug Garforth, director at business sales agent Lowmanbrown agrees: ‘Sellers and business owners need to get real on valuations before buyers will be tempted to make more offers to purchase.’

David Gordon, principal at corporate law firm DG Law, says that successful sellers are being tied in for longer periods. ‘That’s partly at the insistence of the buyers, and partly because in some cases they can’t afford to retire.’

Gordon adds that bright spots in the market include healthcare, niche engineering and businesses focused on environmental sustainability. Also popular with buyers are companies which accept cash as payment rather than selling goods on credit, and IT software or services enterprises.

Michael Bysh, a director at mergers and acquisitions specialist Square Route Solutions, says, ‘Since September last year business has been tough. Understandably, banks have been more selective and tighter on their underwriting but niche engineering companies have done well, especially those serving public service providers such as the NHS and local authorities.

‘We now see an upturn in the market and feel confident that there will be an improvement in activity in the coming months.’