Selling your company may be the biggest financial decision you ever make, and one of the most complicated undertakings you ever participate in. An experienced investment banking team can help you get it right the first time. The right team adds value and reduces stress by running a competitive process that helps you connect to the right buyer.
Privately-owned businesses are less liquid than publicly traded companies. This illiquidity demands a competitive bidding process to extract as much value as possible. The right investment banking firm confers value in at least four ways.
Maximizing Final Sale Price
Many businesses first contemplate a sale after receiving an unsolicited offer for a buyout. Some entertain these offers, hoping for fast cash and an easy sale. Hiring a sell-side advisor in these scenarios can add up to 70% more value because initial offers almost always undervalue a business. The right M&A advisor assesses the actual value of your company, including strategic value. They then create a sense of urgency and a competitive bidding environment to maximize the final sale price.
Removing “What Ifs”
When you sell to the first buyer who shows any interest, you almost inevitably leave money on the table. Buyers submit unsolicited bids for a reason—to capitalize on the emotions of inexperienced sellers, and to get an attractive option for the cheapest possible price. The right advisor removes uncertainty from the process, working with you to decide on appropriate value and set a fair sale price.
Working With Multiple Buyers
Competition inevitably drives prices higher. When you talk to more than one buyer, this competitive bidding environment increases interest in your company. It encourages buyers to accept more favorable terms because they don’t want to miss out on an attractive option. M&A advisors know how to recruit multiple buyers, and how to make the process feel more competitive. They can also help you assess non-price factors such as fit and deal terms that may affect both the ultimate value of the deal as well as its success.
Building a Safety Net
The M&A market is always a gamble. Buyers sometimes back out, especially if due diligence goes south. M&A advisors help build a safety net in at least two ways. First, they take a hard look at your business to identify potential issues that might scare off a potential buyer. Second, they lend an air of professional credibility to the transaction. This shows a buyer that you’re serious, and ensures you only recruit buyers who are committed to the transaction. The right advisor can even help you construct agreements that prevent competitors from sniffing around your business, only to back out with a bag full of trade secrets. You must protect your business at all costs, even if you hope to eventually put it in someone else’s hands. Don’t take on that stress alone. An M&A advisor knits your safety net without adding additional stress.
About Madison Street Capital
Madison Street Capital is an international investment banking firm committed to integrity, excellence, leadership and service in delivering corporate financial advisory services to publicly and privately held businesses.
Madison Street Capital understands the time-sensitivity of corporate finance and is able to
respond quickly and tenaciously to opportunities. Our approach creates corporate finance
transactions where both business owners and investors mutually benefit. We have the knowledge, experience and relationships to match buyers and sellers, as well as to match the
appropriate financing and capitalization structure to each unique client situation.