The Aggregates & Recycling Information Network
Mobile Menu
From the organisers of

2020 / 2021 Edition

Order your copy here

Six Key Steps to Selling a Quarrying Business

Listed in

Business & Finance

First published in the November 2017 issue of Quarry Management as Business for Sale

Jonnie Whittle, financial planner at wealth-management specialists Clarion, takes a closer look at the process of selling a quarry company

Building a successful quarry company demands total dedication. A sale may leave the owner facing big questions and also feeling a loss of purpose. The most successful transitions require owners to orchestrate finely tuned exits. Without detailed planning from an early stage, owners can be forced to exit on other people’s terms.

Fortunately, business owners do not have to carry out this process on their own. One of the keys to achieving a smooth transition is to engage early with a financial planner who will examine the owner’s business and family circumstances in great detail. They will ask questions, agree a strategy and develop a comprehensive financial plan for the exit and beyond. They will then ensure this plan is followed, working closely with the other professionals involved in the sale to ensure everything runs as smoothly as possible in this potentially stressful period.

Achieving a successful exit involves six key stages:

1. Identify personal goals

A potential vendor should start by identifying their goals in selling and begin to plan accordingly. What will life look like after the sale? Does it have to be a ‘clean break’ on day one or will an earn-out period be acceptable? Is the plan to start another business in future, ‘go plural’ with a handful of choice non-executive positions or head straight for the golf course?

A sale is not usually forced upon a quarry owner, so they should only exit if and when it works for them and their family. This includes considering the ups and downs of the quarrying market, which will affect the number of buyers who are interested and the price.

2. Optimize business and personal affairs

More often than not, the sale process is lengthy: allow at least two years from the point at which the business is first marketed, and probably longer. During the early, planning stage a seller should make sure they are in the best possible tax position. This could, foron the better.

On the business front, all outstanding contentious issues, contract disputes and litigation should, as far as possible, be dealt with. ‘Gentlemen’s agreements’ should be replaced with watertight contractual obligations.

3. Determine the value

Accurately assessing the market value of a quarry is a complex process. A vendor needs to compile information on the sufficiency of mineable reserves remaining at the site, factoring in quantity and quality of the reserves, as well as whether areas are permitted or capable of being permitted.

The seller also needs to consider market supply and demand – as this will significantly impact the future prices of the reserves, and thus the valuation of the quarry. Specialist lawyers and accountants can help at this stage.

4. Make the right impression

A business that is being offered for sale needs to look its best, both financially and non-financially. The vendor should take a hard look at the company’s external image. Does the outward appearance match the company’s inner strengths?

A company’s financial track record will be pivotal to the price it achieves. The accounts provided to potential buyers should not usually be identical to those supplied to the Inland Revenue – a corporate finance specialist will be able to prepare adjusted ‘valuation’ accounts that provide a more accurate picture of the potential value of a business to a purchaser.

5. Cast the net

Vendors should consider who would have the most to gain from acquiring their business. They should be prepared to widen their list of candidates, and to engage a corporate finance specialist with a strong track record in the quarrying sector, who can market their company to buyers they might never have thought of.

6. The sale

During the period leading up to an initial offer being agreed, the vendor’s team control the information that is available to a potential buyer. Once heads of terms have been signed, however, the boot is on the other foot and the purchaser’s due diligence team will start picking their way through the company’s deepest secrets.

This is the most dangerous period for the vendor, when the price is ‘chipped’ away and guarantees are demanded. It pays, therefore, to keep the interval between signing heads of terms and completing the deal as brief as possible.

There are two main ways to achieve this. The first is to ensure that the company’s house is in order and there is nothing untoward for the buyer’s due diligence team to unearth. The other is to have another buyer or two in reserve, to keep the pressure on. It is also sensible to have an ‘insurance’ offer in case the favoured buyer pulls out for reasons beyond the seller’s control.

Life after the sale

Many vendors wait until the sale has completed before consulting a financial planner and working out what they want to do with the rest of their lives, and whether they can afford it. Financial planners can, of course, help at this stage.

However, a vendor who has been working toward this moment for years with the support of an expert financial planner will already have a clear picture of the future and the confidence that comes from having a detailed plan to achieve a whole new set of goals. Completing the deal marks, in this case, not an uncertain ending but a purposeful, exciting beginning. 

For more information visit:

Share this page