Strata roll sale: a case study

One of the services provided by BDH Solutions is to help our clients prepare and sell the strata roll/strata management area of their business. This can be a complex process, which involves valuing the asset for sale, negotiating with the parties involved and taking steps for a smoother transition for staff and body corporates.

It makes a great deal of sense to have a specialised professional on your side during the sale of a rent or strata roll. A recent case study shares the step-by-step process of achieving a successful outcome.

Case study: Strata roll sale

The client

In this case, the client wished to sell their business after more than 20 years in the industry. Their ideal outcome was to find a purchaser who would take on the staff involved as well as the strata roll.

To simplify the transition, this client was willing to stay on to introduce the purchasers at the annual general meeting of each strata plan. Coincidentally, every meeting was scheduled for within a three month period, meaning the handover would be a short one.

Our role

As the manager of the sale, BDH Solutions took the time to liaise with the vendor’s accountant to gather the information required prior to marketing the asset.

From here, we spend time identifying potential purchasers and liaising with their banks to ensure they had the capacity to buy.

For this particular sale, neither the staff nor the strata plan owners were aware the owner was contemplating the sale, so the availability of the business was kept strictly confidential between ourselves and the potential buyers while we negotiated the sale price and terms.

Once an agreement was reached, BDH Solutions took over responsibility for coordinating with solicitors and organising contracts. We were present throughout the settlement process to support both parties as well as their accountants and solicitors. Having a single point of contact made the process more seamless for all involved.

Even post-settlement, it is important for BDH Solutions to stay available to provide advice and help with outstanding tasks. This made for an even easier transition between business owners.

The terms

Along with staying on for a handover period, the vendor agreed not to advise staff of the sale until the contract was unconditional. The purchaser took over the office lease for the short term and also agreed to take on the lease for equipment including the photocopier.

To make things easier for both parties, the sale of shares in the company avoided the need for the vendor to go to each strata plan and get new appointment/engagement/authorities. This also preserved the pre-existing right the company had to manage the strata plan.

To finalise the sale of shares, the vendor had to exit from the company’s books; assign the lease of the car and transfer it to the vendor, and take it out of the company name. They also removed cash from the bank and ensured no personal items were left on the balance sheet at settlement. BDH Solutions was on hand throughout to make sure these steps were successfully completed.

The final sale of this asset included the brand, business trading name, all software, bank accounts, intellectual property, systems and the business’s customer relationship management (CRM) platform. Taking ownership of these meant the new buyer could leverage the business’s existing reputation.

Achieving a successful transaction

For this strata roll sale, the process from initial contact by vendor to settlement took four months; a relatively quick outcome given the many elements of this transaction.

Key to the success of this sale was the pre-planning involved. Documentation and financial evidence were prepared to make it easier for the buyer to make a decision. The process was further streamlined by the quick identification of the ideal buyer. BDH Solutions made sure to communicate extensively so all parties felt at ease during the transaction.

For this type of sale, it is important to be aware up front of the outcome you are looking for. With this being said, a degree of flexibility is also essential. You can have some deal-breakers but there must be some areas where you are willing to negotiate.

Work with a specialist broker for the right advice and your sale will go as smoothly as the case study mentioned above.