In the M&A world, it is often said that strategic buyers pay higher valuations than financial buyers do. Are they simply irrational buyers? Not necessarily. In many cases, strategic buyers are motivated by different facets of the acquisition and may have different avenues by which they can generate an acceptable ROI from the target. In client interviews with bankers and strategic buyers who are part of the AxialMarket network, we isolated four concrete and logical reasons behind strategic buyers’ ability… Continue reading
No experienced buyer purchases a company without first learning everything there is to know about it. That learning process is known as “due diligence”.
During due diligence, a buyer, its accountant(s), lawyer(s) and any other professional advisor it employs will examine every aspect of every one of the seller’s contracts, procedures, relationships, plans, agreements, systems, leases, manuals and financial documents.
This process requires an extraordinary amount of time and attention on both the buyer’s and the seller’s parts. That’s why… Continue reading
Most middle market company CEOs are aware of the process of selling a company, but some CEOs are woefully naïve in dealing with the sale of their company. For example, my experience is that the decision to sell is mostly event driven. An event such as sudden burn-out, partner dispute, family death, severe competitive pressures, lack of capital, etc. Seldom do CEO owners plan three to five years in advance when they reach a personal milestone such as 65… Continue reading
So what if you’ve never sold a business before? Who better to lead the sale process than the person who
knows far more about the business than anyone else? Who better to steer the ship than the person who knows exactly what they want from the sale of a business?
Before you answer, pause for a moment to consider the possibility that you might just be the worst possible person to sell your company.
Why? As the one most emotionally… Continue reading
If you’re serious about selling your business – especially to a larger company – going it alone is a bad idea for a
number of reasons.
I recently met a woman (I’ll call her Pam) who owns a successful line of clothing that has captured a loyal following of women who buy her products through a group of retail clothing stores across the U.S.
In addition to having her own clothing line, Pam produces a private label brand for a… Continue reading
Posted by Peter Lehrman
We’ve written before about the importance of choosing the right M&A firm and investment banker when preparing to sell
your business or evaluate an exit strategy. Business owners who skimp in this area are being penny wise and pound foolish.
Here are three red flags that business owners and CEOs should look out for when interviewing different investment banks and M&A Advisors who are pitching to represent them. If the financial statements of your company aren’t… Continue reading