You’ve grown your company to a successful enterprise and feel that it is time to take some of your chips off the table.
Is it time to sell the company and plan an Exit?
As we discussed with recent guests on Colonnade’s Middle-Market Mergers and Acquisitions podcast, Mark Achler and Mert Iseri, perhaps “Exit” is not the right word for what best comes next.
An exit can in fact be a new beginning. With the right headset to find the most synergistic buyer, company owners/founders can shift their perspective and recognize that what might initially look like a short-term transaction is indeed a long-term partnership.
The way to maximize value is not just looking backward as a multiple, but looking forward using the rationale. Strategically, why is the combination so valuable? If you can get everybody aligned around the rationale and the financial implications of that rationale, that’s how you’re going to drive a better price for an exit.
How do you uncover the rationale that a potential buyer or set of buyers may have to acquire your company?
As Mert shares in this video:
“You uncover it (the rationale). You unearth it over years. And this is why we urge entrepreneurs to put their party dresses on.
Build this trusted relationship over time with a fundamental question:
How can I help?
How can I help you push your agenda forward?
How can I help my customers and serve your customers better through synergy?
We hope that you enjoyed the funny reference to Jerry Maguire and the “help me, help you.”
That is what M&A transactions are all about. It is not just about selling a company but starting a new chapter. Realizing the synergistic potential of the journey, when “ two plus two equals two hundred”.
If you’d like to listen to the full interview with Jeff Guylay, Mert Iseri, and Mark Achler, please click here.
You may still have more questions about the actual transaction process, once you have discovered the optimal rationale for finding a buyer/partner. This post/series of podcast episodes answers the following questions:
- When is the right time to go to market?
- How long does the process take?
- What type of process yields the best outcome?
- How do you manage the situation internally with employees who may not know the company is being sold?
- What are some pitfalls to avoid?
- How does one pre-qualify potential buyers?
- What are best practices for documentation, such as nondisclosure agreements (NDA), confidential information memorandum (CIM), indications of interest (IOI), letters of intent (LOI), etc), and who prepares them?
- What is an electronic data room and why is it so important to set this asset up correctly?
- What is the best way to prepare for management team meetings?
- How do you get the best deal terms AND price?