Xigo, a leader in the sale of privately owned companies, recently facilitated the sale of one of the largest automotive manufacturing companies in SA to a Canadian firm.

Xigo’s Deon Wolfaardt - Head of Business Development said that the SA company selected Xigo to sell its business due to their flexibile approach and 5 step methodology, coupled with their partnership with global leaders, BCMS Corporate. “As part of this international network, we are able to offer clients access to a database of over 150 million potential acquirers worldwide,” he added. Wolfaardt commented on common reasons for the sale of private companies: “Most owners sell for a combination of reasons, which include lifestyle changes; the necessity or desire to convert assets into cash; as well as expansion factors and the need for investment.

“We often find that an owner has grown tired of labour issues, or has lost the entrepreneurial excitement and wants to move on to other activities, be it business or personal,” he added. Xigo, in its 4 years of operation in South Africa, receives many enquiries from overseas’ companies looking to invest in South Africa for a number of reasons, the most common being to expand into the African market and leverage off an established footprint. Many South African firms have the expertise and knowledge on how to conduct business into Africa. “South Africa is best positioned in terms of corporate governance and regulatory bodies to make it attractive for foreign investors interested in the African market, which is the next investment frontier,” he added.

“For this reason,” said Wolfaardt, “we cast our net globally through our partnership with BCMS Corporate, and bring to the table anywhere between 150 to 250 potential acquirers, who have been identified as potential buyers of the local company. Our sellers experience the benefit of our methodology of qualifying bidders, which could lead up to 3 to 6 serious contenders.”

Xigo deploys a different methodology to the traditional way of selling privately owned companies in that they view the seller’s business beyond the usual accounting evaluation and look at future growth and potential. “It’s a case of looking at the two companies and evaluating the value of the union, which can result in a substantially higher selling price than a traditional valuation.” Wolfaardt added that it goes beyond the financial evaluation and potential value, as it’s also about ensuring a close cultural, emotional and strategic fit, as this bodes well for the long-term success beyond the sale.

Xigo’s extensive experience in negotiation and deal-making supports the seller through the entire process to conclude a deal in a structured and sensitive manner.  Wolfaardt said that Xigo run regular seminars, which take potential sellers through the entire sales’ process, imparting a great deal of advice and a 78-point checklist on how to prepare a business for sale. To date they have delivered 35 seminars across the major centers of South Africa.
For more information about the seminars in June, visit www.xigo.co.za