Business Exit Planning: Distressed Trading and M&A Explained
March 26th 2026 | Posted by Stuart Clark
Business exit planning was the thread running through FD Recruit’s Virtual Boardroom, alongside FRP Advisory in Brighton.
Neville Side, restructuring advisory partner at FRP and Adrian Alexander, corporate finance partner for the firm’s southeast team, walked the room through the gap between a difficult trading backdrop and a deals market that has started moving again and what that means for owners weighing up a sale.
“The earlier that you act, the more options there will be.”
The Distressed Trading Backdrop FDs Are Working Against
The pressures on FDs and CFOs right now are stacking up rather than easing off. Neville pointed to a delayed budget, global shocks affecting supply chains, rising national insurance and minimum wage costs and an HMRC that is chasing owed money far more assertively than before. Insolvencies sat near 24,000 last year, well above the 16,000 to 17,000 seen before the pandemic and construction remains the sector most exposed because margins there leave no room for error.
None of that means business exit planning should wait for calmer conditions. Neville was direct about the businesses that fail, describing them as the ones with “the poorest MI, the poorest forecasting.” Weak management information does not just cause insolvency risk, it removes options entirely, because directors cannot act on problems they cannot see.
Why the M&A Market Is Moving Despite the Gloom
Adrian’s side of the market told a different story. Overseas buyers from Sweden, Italy and Spain have been active in UK acquisitions while domestic trade buyers held back and that appetite has only broadened since fresh interest returned locally last autumn. Private equity still holds significant capital and banks say they remain open to funding deals, even where the gap between what sellers expect and what buyers will pay stays stubbornly wide.
“You’ve got to have that longer-term strategic view.”
Timing a sale around headlines rarely works, however, timing it around the health of the business and the readiness of its numbers does.
Getting Business Exit Planning Right
Much of the session focused on why owners misjudge what their company is worth. Adrian explained that EBITDA multiples get distorted because they are usually built on public information and incomplete deal data and because sellers rarely learn whether an earn-out was ever paid in full.
Once financial debt and working capital adjustments come off the headline figure, the real number often lands lower than expected. Benchmark data from the UK 200 Group has tracked average multiples moving between four and a half and six times over recent years, size still being the biggest single driver.
Practical Steps FDs Can Take Before a Sale
For FDs supporting an owner through this process, a handful of practical steps came up repeatedly during the Q&A:
- Start the conversation early: Three years ahead was described as ideal timing, giving enough runway to fix issues before a buyer finds them.
- Build a credible forecasting track record: Buyers, particularly private equity, expect management information they can trust, not numbers assembled for the sale process alone.
- Get the data room in order: Contracts, employee records and renewals are unglamorous but they slow or kill deals when missing.
- Widen the customer base: Revenue concentrated in one client is consistently the hardest thing to sell around.
- Have the valuation conversation honestly: Sellers hearing inflated figures secondhand need a grounded reality check before talks with a buyer even start.
Structures are shifting too. Two-step exits are gaining ground for owners who want to step back gradually, while trade sales still account for the majority of completed deals.
In Summary
The wider point from both speakers was consistency. Whether a business is heading towards distress or towards a sale, the same habits protect it, such as regular cash flow forecasting, documented decisions and advice sought early rather than as a last resort. Business exit planning is not a project for the good years only; it is the discipline that determines whether a downturn becomes a threat or, as Neville put it, someone else’s opportunity.
