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Value Improvement

January 9, 2010 Comments off

What We Do

Paradoi is a business that manages companies in the Small and Medium Enterprise (SME) sector to improve their value prior to sale. We work with and for owners of businesses who are looking to retire or move on.

Increasing Value

We believe that many small and medium sized businesses offered up for sale are significantly undervalued. Our core competency is to release that value for the owners whilst presenting the company as a good value buy for investors. We do this on the belief that the market for SME’s in Australia is inefficient with a poorly developed mechanism for releasing value. For example in Australia it is usual for SME manufacturing companies to sell for approximately three to five times earnings on a trade sale whereas recently listed manufacturing companies on the Australian Stock Exchange claim twelve to fifteen times earnings. We aim to close this differential by doubling the value of our client businesses based on an independent valuation at the start of the project and the eventual sale price.

Personal Approach

Our business works with owners, management and staff to improve the value of a business from an investor perspective. We have a strong record of building value in the SME sector and work with no more than three companies at once to achieve these aims. Experience shows that the optimal time for our involvement in an enterprise is on a medium term basis of between one to three years.

The process begins with a diagnostic that identifies key areas for value improvement. We agree on a value improvement plan with clear quarterly milestones through to the eventual sale of the business. The value improvement plan is an important guide with clear quarterly performance targets during the life of the project. As one of the first targets for business improvement will be corporate governance – achievement is reported back to your Board that meets regularly during the process.

Our business builds relationships with a network of investors who are looking for high quality enterprises. These include individuals, family trust companies and both listed and unlisted investment companies. From time to time, we make equity investment in our client companies. We work with any business sale agents employed by you and your professional advisors in legal and accounting.

How it Works

Our fees are essentially performance-based – determined following the diagnostic and clearly set out in our final proposal to you. The business diagnostic is a team effort and is usually completed within thirty working days.

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