A Game Changer for Ambitious SMEs

I believe that the ” Agglomeration ” business model can be a game changer for ambitious independent business owners seeking to release the true value locked up in their companies.

The Singapore based private equity company The Unity Group has an interesting take on this business model. Indeed Jeremy Harbour and Callum Laing are considered by many to be the original brains behind the ” agglomeration for independent businesses ” concept.

I’ve added below a link to a video by Callum Laing, of Unity Group. In this 7 minute video Callum explains 9 key benefits of the agglomeration business model. Here’s the link :-

Whilst ” going public ” via an IPO can transform the valuation of a business it should be recognised that the IPO process is expensive in both :-

Monetary terms
AND
In terms of the time commitment required from the senior people in an organisation.

The Unity Group version of agglomeration seeks to address both of those issues as follows :-

Monetary Costs
At the present time, if your company is part of a Unity Group agglomeration for IPO your company will not be required by Unity to contribute to the pre IPO costs which, as mentioned above, are substantial.

Time Costs
Unity Group have geared up their Singapore office to handle most of the time consuming activities in the run up to IPO including :-

Dealing with Stock Exchange requirements
Finding investors
Appointing and coordinating professional advisors to the IPO.

We all know that there are no “ free lunches “ in business and, in return for their support to you pre IPO, Unity Group would seek to put a relatively modest initial valuation on your company at the IPO date. Unity Group’s approach is to put in place a framework to incentivise each company in an agglomeration “ group “ to work towards growing the share price post IPO towards that typical for the particular business sector. For example in the recruitment sector P/Es of around 19 are currently possible for a quoted company……….a valuation multiple anywhere near that is impossible for a private company.

I hope you find Callum’s video informative. If you’d like an introduction to one of the senior partners at Unity Group or if you’d simply like to know more about the agglomeration business model in general then please don’t hesitate to get in touch with me as follows :-

Phone : 0141 – 280 – 0404
Email : jim@jwmbusinessadvice-accountancy.com

Until the next time

Jim