High level of businesses to change ownership this year, says survey

A high level of business sale and transfer activity should be expected in 2006, according to a Bank of Ireland business banking survey released today.

When asked about their intentions, 8% of Irish SMEs stated that they intended to sell their business and a further 9% intended to retire and handover to a family member this year.

In terms of sectors, leisure and retail SMEs are the most likely to sell, whilst agri and business services are more likely to transfer their business.

“Strong economic growth has led to an increase in new business investors in Ireland over the last five years,” said Cathal Muckian, director of business banking at Bank of Ireland.

“This, combined with a growing trend for entrepreneurs to exit at an earlier age means that 2006 is going to be another busy year for business sale and transfers.”

This research supports the view of accounting firm Deloitte & Touche, who recently teamed up with BusinessShop.ie and to deliver quarterly business seminars to Bank of Ireland’s 600-strong business banking team.

Deloitte & Touche believe that a variety of factors including strong corporate cash earnings, the availability of bank funding and low interest levels are fuelling business disposal activity in the Irish market.

“Many entrepreneurial businesses that were formed during the 1980’s are now reaching maturity and these owner managers have a decision to make, either to retain, sell the business or transfer it to a family member,” says Greg Hogan, a senior manager in Deloitte Corporate Finance.

“Owner/managers need to be aware of the options for sale or transfer and the related tax considerations and particularly not to overlook the disposal option in the current buoyant M&A market.”