The Problem:
How Much Value Are You Forfeiting?
You are an expert at running your business…
But are you an expert at maximizing its value?
You’ve strived for years to make your business a success. When it’s time to divest and realize on your efforts, will it be poised to attract the maximum value?
Most owners must direct the majority of their focus on immediate issues, such as cash flow, delivering product, or HR concerns. While vital, these also serve as a tradeoff to time spent refining your strategic plans & priorities with a view to optimizing future value​.
As you contemplate a future sale:
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Do you know what will drive Exit Value for your particular business, besides profit?
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Does your current strategy fully align with those Exit Value drivers?
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Do other important factors support optimal value, such as management depth, margins and growth trends & outlook?
Will you sell at the right time?
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In addition to personal preferences, how could general economic conditions, industry trends, and competitive dynamics, among other factors, weigh into this decision?
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What will it cost you if you time it incorrectly and miss the best opportunity?
Are you waiting until it’s convenient to begin preparing business for this vital phase?
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Will it ever be a convenient time to do so?
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Is it better to be too early, or too late in addressing the issues noted above?
What are the options to avoid Forfeiting Value?
1. DIY​:
You’ve built it and know the industry, perhaps you’re the right one to optimize strategy, operational enhancements, as well as manage a transaction process all on your own.
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Will you know if your strategy and operations are fully aligned with Exit Value drivers?
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Will you get the deal timing right?
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Will you identify all the potential acquirers?
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Can you manage the business while running a transaction process?
2. Consultants & Advisors:
Many owners engage business consultants to assist them in developing and perhaps even in executing operational enhancements. They also often work with deal advisors or business brokers for the sale process. Many of these professionals are capable and diligent.
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Will the chosen strategic & operational initiatives fully align with Exit Value drivers?
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Are a consultant’s incentives aligned with an ultimate Exit Value?
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Are deal advisors able to maximize value if the business enhancements haven’t occurred?
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When might a deal advisor encourage you to start the transaction process?
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Is the any integration between the Consultants & the Business Brokers?
3. Aligned Partner:
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What if your collaborators were experts that lead the design & implementation of business enhancement initiatives which fully align with maximizing Exit Value?
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They also had leading expertise in creating & closing synergistic strategic transactions, developed over 20+ years of innovating the deal process?
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Their incentives were fully aligned with yours, to maximize Exit Value over the next 1 to 5 years?
Financing
Mergers & Acquisitions as well as Public Listings
Strategic Partnerships
Our professionals have prior experience as Founders, Growth Executives, and Management Consultants , as well as roles within Investment Banking, Fund Management and Law. We’ve also collectively completed over 75 transactions valued at > $3 billion.
Over 50 years of Creating & Realizing Value​, with deep expertise in:
Mergers and Acquisitions
Strategic Planning
Operational Improvement
We Partner with Owners over three Phases
This typically occurs over a period of one to three years, but could also take more or less time.
Phase I: Enhance Business Fundamentals
We implement of five priority strategic initiatives​ that are crucial to future acquirers:
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Margin Enhancement ​
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Revenue Growth: optimize pricing, new products, new sales channels / territories​
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Technology Efficiencies and performance improvement through enhanced data collection & utilization
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Succession Planning & team building​
Phase II: Initiate Exit Preparations
Aspects of preparing for a future Exit process begins early on, even if the transaction is still several years away.
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Define & advance toward a refined Vision for the business
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Identification of the particular Exit Value Drivers for each business, which then drive strategic & operational priorities
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Initiate an ongoing dialogue with a selection of prospective future acquirers
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Continuously monitor external indicators & trends to optimize Exit timing​
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Develop professional deal marketing materials, which emphasize, Differentiation & Growth​
Phase III: Manage & Close the Deal
Aspects of preparing for a future Exit process begins early on, even if the transaction is still several years away.
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M&A Experts with over 20 years of extracting synergistic value on challenging deals
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We build the most demand for the deal & engage with prospective acquirers no one else would identify.
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We know how to navigate the challenges and traps, while capitalizing on opportunities over the transaction process.
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Experts at creative deal structuring & negotiations, realizing incremental value while also meeting your qualitative goals.
The Value We Bring
How does an owner benefit from a partnership with us?
The scenario below is for illustrative purposes only, to demonstrate the incremental value we bring to owners.
Base Case
- Without our involvement, assuming the indicative metrics below.
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Revenue $10M ​
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Margin of 10%: $1M EBTIDA ​
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4x Exit Multiple: $4M Value
As our Partner
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Revenue growth of 25%: $12.5M​
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Margin expansion to 15%: $1.875M​
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Elevated Exit Multiple of 5x: $9.375M Value
What it Costs: Illustrative Engagement Terms
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A two to four year engagement period, to enhance operational efficiency & growth​
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Owners have option to maintain, or ease-up their current activity level ​within the business
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Initiate formal Exit process by end of second year, but we’re flexible & opportunistic ​
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Remuneration is principally back-ended and linked to an Exit event​
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Modest annual retainer, reimbursed through interim performance improvements
Illustrative Case Studies
Practical examples:
$15 MM business- post-acquisition value increase
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Situation: Private equity acquired agricultural equipment dealer. The company success is built on the skills of the previous owner, but no success plan has been built or operations goals articulated. The previous owner has committed to stay for 1 year
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Action: Articulated a clear set of targets and goals for the organization from the board, and the steps needed to achieve these goals. Focussed on fundamentals of sales including CRM use, sales process, and sales funnel. Restructured parts and service department to create outbound sales culture. Address skills gaps with staffing changes, and created a training program for rapid deployment of new staff
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Impact: 18% margin increase in year 1, and 15% increase in year 2. Client achieved goals of a highly structured, goal-focussed organization that was autonmous- and didn't require the former owner.
Sale of agrifood start-up
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Situation: Engaged by an innovative U.S. based agrifood technology business with $3M in revenue to manage a value realization process. As they operated in several divisions at different stages of development, they were unclear whether to sell all or part of the business
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Action: Identified & engaged with a broad range of prospective acquirers from the food, feed and animal health sectors. Advice was to await indications from the market on value before deciding on the scope of the transaction.
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Impact: Ultimately closed on a transaction valued at ~$50M, divesting of the more commercially advanced segments of the business, while retaining a growing segment that had the potential to be worth even more than this amount in the future.