Selling a business at maximum value requires more than the standard housekeeping of providing historical financial information and addressing buyer’s due diligence requests. It also requires a focus on the company’s next chapter, showing buyers how company performance can reach the next level with the additional resources that come from an acquisition or partnership.
The buyer that pays the highest price is often the one who sees the most growth potential from the acquisition. Because of that, efficiently articulating a company’s growth opportunities is critical to maximizing value, even for companies that have not traditionally focused on growth or do not have any immediate plans to pursue growth.
Often overlooked are the available growth opportunities that the current owner may not be inclined to pursue (e.g. given the capital investment required) but a new owner may seriously consider (and be willing to fund) such as:
Expansion: Into new products, services, or geographical markets
Growth: In existing products, services, and markets requiring additional key hires
Acquisitions: To consolidate fragmented industries, realize synergies, or add new capabilities
It is one thing to list several growth opportunities. Even more effective is illustrating the financial impact of such opportunities to help a buyer translate the opportunities into an increased purchase price. Adding “meat on the bones” of growth opportunities with financial estimates, even if the price is just indicative and preliminary, will help force the discussion on what it all means for the purchase price.
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