Globally, a third of private businesses to change hands in the next decade - Press Release

The latest findings from the International Business Report (IBR) show that 28% of privately held businesses around the world are expected to change hands within the next ten years.

The annual survey found that business churn is expected to be the highest in South Africa (52%) followed by New Zealand (51%), Canada (50%) and the Philippines (48%).

The greatest change in attitudes to business ownership is in the Philippines which has seen the expectation of a sale in the next ten years grow from 6% in 2005 to 48% this year. In contrast Indian business attitudes have remained static over the same period and are least likely to change hands, with only one in ten owners expecting to sell in the next decade.

Alex MacBeath, global leader of privately held business services for Grant Thornton International, said: “Our findings show an overwhelming expectation of change in the structure of privately held businesses in the coming years. With this in mind, business owners need to start planning for the future and take professional advise on how to best plan an exit from the enterprise. Interestingly, in the more established western economies we are seeing a strong trend of private businesses coming to the end of their current lifecycle, which we feel will spread to less developed economies in the coming years.”

Pace of change

 
The survey of 7,200 business owners in 32 countries also found that, of those businesses expecting to change hands, 25% will do so within the next two years. The greatest opportunity for involvement in a business exit is in Germany, with 39% anticipating a change in ownership within the next two years, followed by South Africa (38%) and Sweden (37%). Globally, over the next decade, the majority of privately held businesses expecting a change (48%), expect it to happen in the next five years. However, 67% of surveyed businesses in the Philippines are expecting a change of ownership in a slightly longer time period of six to ten years.

Type of change

 
Globally, a trade sale (25%) is the most likely future of a privately held business, followed by private equity/bank finance (20%), and management buy out/buy in or mergers (both at 16%). Sale or transfer to a family member is the expected outcome for 15% of these businesses internationally, however, there remain exceptions to the rule in countries such as Canada where 33% see this as the most likely form of change of ownership.

Ends

Notes to editors

About the IBR

 
Grant Thornton International started a major annual survey of the attitudes and expectations of small and medium-sized businesses in 1992 called the European Business Survey (EBS). In 2003 the research project was widened to an international perspective covering medium-sized businesses and renamed the International Business Owners Survey (IBOS).

In 2007, the survey’s name was changed from IBOS to the International Business Report (IBR). The IBR survey draws upon 15 years of trend data for original EBS participants and 5 years for original IBOS countries. 15 year trend data is available for: France, Germany, Greece, Ireland, Italy, the Netherlands, Poland, Spain, Sweden, Turkey and the UK, while 5 year trend data is available for Australia, Canada, Hong Kong, India, Japan, Mexico, Singapore, South Africa and the US.

Grant Thornton International will donate US$5 to UNICEF for every completed IBR questionnaire. In 2007 this will result in a donation of over US$35,000.

The research was conducted by Experian Business Strategies Limited and Harris Interactive. All figures were correct at time of going to press.

About Grant Thornton International

Grant Thornton International is one of the world's leading organisations of independently owned and managed accounting and consulting firms providing assurance, tax and specialist business advice to privately held businesses and public interest entities. The strength of each local firm is reflected in the quality of the international organisation. All Grant Thornton International member firms share a commitment to providing the same high quality service to their clients wherever they choose to do business.

Grant Thornton International is a non-practising international umbrella organisation and does not deliver services in its own name or otherwise. Each member and correspondent firm in Grant Thornton International is a separate national firm. These firms are not members of one international partnership or otherwise legal partners with each other (with the exception of certain limited instances), nor is any one firm responsible for the services or activities of any other.

For further information please contact:

Paul Donlon, Catherine Huffer, or Katherine Sladden
Grant Thornton International press office.
T +44 (0)870 444 4568 / 07970 029 650
E gti@fourcommunications.com

Neil Bird
IBR project manager
Grant Thornton International
T +44 (0)20 7391 9516