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Audio & Video Media Production Equipment Supplier: Superb Development Potential

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Sale Memorandum

Audio & Video Media Production Equipment Supplier:
Superb Development Potential


Ref.ID012

Location London

Asking Price £ 675,000

Confidential offered for sale

Asking price includes:

Current turnover circa £1.15M
Gross profit circa 16%
Turnover forecast to 31st January 2008 £1.6M, GP forecast 20%
Tremendous reputation
High market profile
‘Just in Time’ stock system
Low overheads
Goodwill
Training & Handover
Finance available to buy this business subject to status. All regulated business is passed to independent financial advisors who are regulated by the FSA

Business profile:

This very well known supplier of media production equipment to the audio and video market was established by the current owner four years ago. Since that time it has built significant presence within the market place through a mixture of entrepreneurial spirit and market knowledge.

The owners accurately predicted that Apple would be a dominant force within these markets. They therefore set about ensuring that they would be granted preferential status from Apple Computers UK. This they have achieved since the company is now recognised as Apple Computers leading UK ‘Solution Expert’ – a remarkable achievement for such a new business.

In only a relatively short period of time the company is generating revenues well in excess of £1.1m. The forecast turnover for y/e 31st January 2008 is £1.6M, representing the winning of significant new orders and greater market share. Gross profits will be circa £320K (20%).

The business has a healthy mix of clients equally split from the professional and consumer markets.

The company sells into three main markets as follows:

• Audio, circa 35% of current sales
o Typical customers
 Amateurs/Hobbyists e.g musicians and DJ’s
 Semi-Professionals
 Professionals including Studios, Producers, Engineers, Bands/Artists, Music Publishers & Education

• Video, circa 25% of current sales
o Typical customers
 Amateurs
 Videographers i.e. corporate videos, wedding videos
 Broadcast Media e.g. TV commercials, Pop Videos
 Broadcast Channels
 Movie Makers – smaller companies

• Apple Mac, circa 40% of current sales
o Typical customers
 Any person or commercial/educational enterprise buying Apple Mac equipment


The introduction of High Definition (HD) television is further driving market demand. The need to capture, edit, animate, mix and master in this format is producing orders from both the professional and home consumer video markets.

The company has significant internet presence: the majority of business is generated through this source. A full ‘e-commerce’ enabled web site produces in excess of 70% of annual sales.

In addition to Apple Mac the company stocks equipment from other well known brands including:

• Yamaha™
• Pro Speakers & Monitors
• Mackie®
• Digidesign
• MOTU
• Waves
• Focusrite®
• t.c.electronic
• Argosy® (Studio Furniture)
• Proavio™
• Sony™

The company recently won a Mac User Award in Mac User Magazine for the Pro Avio™ desk top storage system, the most powerful and fastest system retailing at under £1000: it outstripped all its competitors in terms of speed and security.
Equipment

For demonstration purposes a broad range of equipment is utilised within the three main market areas of audio, video and Apple Mac.

Customer Service

The highest levels of personal service sit at the heart of the company’s customer engagement strategy.

Key Strengths

The Company stocks only the best and most well known brands which provides for immediate presence. This is combined with competitive pricing, first class market and product knowledge, and a demonstrable ‘easy to do business with’ attitude. This is undoubtedly a winning combination. The business consistently delivers the highest levels of client satisfaction.

The business does not provide credit facilities to any consumer or business customer: there is no bad debt. The company is a licensed credit broker and financing facilities are provided to circa 80% of clients through major banks and finance companies. Average order value is circa £2,000.

Working through a ‘Just in Time’ stock system means that very little stock is held and that most orders are delivered from the manufacturer direct to the customer. No warehouse space is needed.

The company has always recognised the importance of investing in Information Technology to serve as the driving tool for the business. This has proved to be a sound strategy.

Key Opportunities

To date the company is producing sales of circa £100,000 per annum through a distribution channel to other retailers. The current owners are confident that this route can drive a significant increase in turnover in the years ahead.
Premises

The business is currently run very successfully from the owners’ dedicated sales office and store room. The new owner would need to relocate the business in due course. Since the main channel to market is the internet, the business can be readily relocated anywhere within the UK or even overseas.
Advertising and Marketing

A marketing plan addresses the following activities:

• A professionally hosted, designed and maintained website, which has been fully optimised. Google™ AdWords are utilised.
• Regular advertising is placed in specialist magazines including Sound on Sound.
• Specialist websites are utilised including TV Bay.com.
• Exhibitions are frequently used which include Cannes Film Festival, Mac Expo, Video Forum and Channel Expo.
• Circa 10,000 names are held on the client database. They are mailed at least twice per annum

As the company expands a new strategic marketing plan will be developed and executed addressing all media.
Financial profile:
The business is being offered for sale on an ongoing concern basis: all financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.
The business is financially stable with no borrowings. Current turnover forecast for the y/e 31st January 2008 is circa £1.6M. Current gross profits are circa 16% and are expected to climb to 20%.
Employees

The company employs a team of efficient and effective people as follows:

• Office manager – part time five days per week
• Sales manager – full time
• Sales - two persons part time
• Web architect – part time
• Web propagator – full time (assists with sales)

In addition a bookkeeper works in the business for one day per week.
Support and Training

Unusually the current owners will agree to an extended period of handover, training and familiarisation to ensure a smooth transition to new ownership. The current managing director will be happy to offer his services on a consultancy basis longer term, if required.
Reason for Sale

The current owners are looking to dispose of their interest in the business to enable them to concentrate on their other professional activities.
Turner Butler Disclosure Statement:

This statement applies to information relating to any company or other undertaking or business advertised for sale by Turner Butler (a 'Business')

The information supplied by Turner Butler on its website or in any other promotional material ('the Information') is not and is not intended to constitute an offer for sale of the Business or any assets of the Business or of the shares of any company which owns the Business.

For the avoidance of doubt there is no intention to create a legal relationship which will only come into existence when a written contract for sale and purchase of the shares in or the Business has been entered into

The Information provided is not intended to address your particular requirements. Further the Information does not constitute any form of advice recommendation representation endorsement or arrangement by Turner Butler and is not intended to be relied upon in making (or refraining from making) any specific decisions.

Any agreements transactions or other arrangements made between you and any client of Turner Butler are at your sole risk and responsibility. The prospective sellers of the Business have provided the Information to Turner Butler. The Information has not been verified by Turner Butler.

You must carry out your own due diligence and satisfy yourself as to the accuracy of all matters. In the case of the sale of shares in a Business the Information has been prepared on the basis that the shares will consist of or include more than 50% of the voting shares and that both the seller and the buyer is either a body corporate, a partnership, a single individual or a group of connected individuals so as to fall outside the scope of regulated activities as defined by the Financial Services and Markets Act 2000. If you are considering a transaction which falls within the scope of such regulated activities you cannot do so through Turner Butler.

Appropriate professional, legal and accountancy advice should be obtained before making or refraining to make any decision.

Turner Butler does not accept any responsibility or liability for loss or damage of any nature that may occur by reliance on the Information. Neither Turner Butler nor any of our employees or agents makes any representation as to the completeness or accuracy of the Information nor do we accept any liability for any losses, costs, liabilities or expenses which may arise directly or indirectly from your use of, or reliance on the Information.

This document is governed by and shall be construed in accordance with English Law and any dispute arising in connection with it shall be subject to the non-exclusive jurisdiction of the English courts

Turner & Co (GB) Limited registered in England and Wales under company no. 2477988 of registered office Savoy House Savoy Circus London W3 7DA, trading as Turner Butler © Shaun Sweeney October 2006

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