RADIO INTERVIEW on 702 - WORLD AT 6

13/06/2006 - Kevin Homann is interviewed by Chris Gibbown (World at 6 on 702)

Chris Gibbown

Now you have a business perhaps which you have built up over the past few years, and you are wondering whether or not sell, it is now a good time looking at the markets, looking at all the fuss and “gefuffle”. You might have one or two concerns … well exit timing is always tricky, but joining us now from Spirit Capital, specialists in this area, Founder and Director, Kevin Homann. Kevin, good evening to you and welcome to the World at Six. Exit timing … how do you get it right and what do you think about right now?

Kevin Homann

Hi Chris. Yes our experience in the private market is that valuations at the moment are about as high as they have ever been. Multiples have increased quite dramatically over the last five years and that is coupled with good trading performances from businesses as a result of the economy and a combination of those two has pushed valuations quite significantly higher, so our current experience is that if you have a successful business that, you know, you are approaching retirement age or whatever the case may be, you should give quite strong thought to exiting now. It is a strong market and valuations are strong.

Chris Gibbown

Are you seeing a lot of activity in this sort of area?

Kevin Homann

Yes you know there is always a lot of activity in the private market, you know the private equity funds are very active in this area, they are always looking for good deal flow and you know, I think a lot of private business owners have realised that the market is strong and there is a lot of activity here. People are capitalising on the valuations as they stand and activity is strong.

Chris Gibbown

Of course the reverse is also true isn’t it, and that is if it is a great time to sell your company, it is a pretty poor time to buy one!

Kevin Homann

[Laughter] … Yes it is a very interesting observation. You know, I think it depends where your funding is coming from. You know, I think in the listed sector except for the last couple of weeks, you know, listed valuations have been quite good and so the listed companies are placing shares at high P valuations and so their cost of funding is quite cheap, so from their perspective, they are managing to swallow these kind of valuations. You know, if your funding is coming from other sources, the private equity arena may not be as cheap and maybe you can't swallow that kind of valuation.

Chris Gibbown

And this is something that Spirit Capital, your company, has specialised in?

Kevin Homann

Yes we have been going for five years now and we specialise in the private market … everything from acquisitions … disposals … management buy-out etcetera and it is something that we have created a niche and a good name and a good reputation, so … we have been very active in that area and we hope to continue that.

Chris Gibbown

Good enough. Kevin Homann, Spirit Capital Founder and Director. Thanks for being with us on the World at Six.

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