Selling Your Company: A Wise Matchmaker Brings Many Suitors
Selling your business can be painful; it takes a lot of hard work. It’s a challenging and time-consuming process, equally rife with opportunity as well as pitfalls. When you consider that you’re embarking on a long courtship process, searching out compatible partners and negotiating mutually beneficial arrangements, it’s not unlike searching for that perfect woman to marry. Finding the ideal mate takes a lot of behind the scenes preparation to be successful. Hire an M&A matchmaker to help you identify and select the right merger partner.
Investment bankers increase the likelihood of successfully selling your company, to the ideal acquirer, at a premium valuation. Let’s break that statement down. First, a successful sale transaction is more likely to occur because the growth story has been aggressively sold, the financials have been ideally presented, all of the possible buyers have been properly approached, and multiple bidders are engaged in an orchestra of simultaneous competitive negotiations. This environment is substantially likelier to lead to a closed deal than a process involving only one bidder at a time sporadically receiving confusing financial statements cobbled together by the seller’s overworked financial staff.
Secondly, the ultimate acquirer is more apt to be the ideal buyer because a formal search was performed to identify all possible buyers, strategic and financial, on a worldwide basis. This includes those outside of a seller’s direct industry, markets and geographies, where out-of-the-box thinking by an investment banker typically uncovers high-value buyers.
Lastly, a formal matchmaking process will result in a higher deal valuation that will, in all likelihood, exceed any contingent fee paid to an intermediary. The optimal presentation of the adjusted financial results, highlighting key points of interest tailored for each acquirer, in combination with the dynamics of indirect negotiations, will provide the leverage and optionality needed to credibly take aggressive positions on valuation and key contract terms.
To maximize the outcome of a sale of your company, business owners should expect that would-be suitors will need to be wined and dined with lavishly detailed financial statements. They need long, hand-held walks through the facilities. They need sweet talk about price-earnings multiples. C’est l’amour.