feeling bogged down by all the operations? Are you feeling ready to start something new? Are your outside investors ready to collect their return? Are you just tired, and ready to leave the business?
There comes a point in time for every business owner, when you are ready for a change, or at the least you need to plan for change. Wherever you are at, it is never too soon to start thinking about and planning for an exit strategy. While there are many options to consider, the following are some of the more common exit strategies for you to consider.
You can either position your company to be bought by another company or you can buy another company to position yourself for longer-term strategies. It’s important to understand the complexities of mergers and acquisitions as they are done under tight deadlines. It is no secret that a majority of mergers and acquisitions (M&A) fail to deliver the promised synergies or expected value. For some companies, the problem lies in a flawed strategy for buying the target company. For others, the problems occur after the close as it becomes apparent that insufficient rigor was paid to merger integration. This is because few companies have the internal resources available—a pool of experts that can carry out a transaction from target identification to synergy realization—to consistently excel at all phases of the M&A life cycle.
Bringing in the right external expertise improves the quality of the strategic rationale for buying the company, and performing due diligence while also accelerating synergy realization and reducing risks of the integration. In summary, let AMPED Business Consulting increase the probability that your M&A transaction will be among the few success stories that create shareholder value.
Our broad expertise includes strategy development, due diligence, pre-merger planning, post-merger integration, spin-offs, and carve outs. We help our clients capture maximum value from their deals—in both immediate returns and longer-term competitive advantage.
While selling a company might appear straight forward, there is a lot of planning involved. First, you need to ensure that you have performed your due diligence, and put your company financials, data, and key elements together. The proper aggregation and presentation of your company will give you the best chance to get the most money, and to ensure a quick, clean, and efficient transfer of ownership. It is also worth keeping in mind that being able to source and identify private buyers can, in many circumstances, substantially increase the company’s valuation.
While this is not the typical exit strategy, there are times when your business is stable, relatively easy to run, and yet you don’t want to sell for whatever reason. In this case, it can make sense to bring on a CEO or operator to run the business from day-to-day to free you up to pursue other interests. Selecting the right individual and putting safeguards and processes in place are essential to be sure the business does not run into the ground, that your cash cow isn’t cannibalized, and so you can continue to earn income from the business for as long as possible.
IPOs have become very challenging since Sarbanes-Oxley has come into play. While it can lead to a large payday, you will be selling a portion of your company in the public markets. Under this model, you and your management team typically remain in place for a period of years, your investors and managers maybe able to sell some stock, and operations will generally continue as per usual. However, your company will be under additional regulations, and scrutiny from Wall Street and institutional investors. We suggest you carefully evaluate this course of action, as many teams simply do not want to deal with the headache of being a publicly traded company. It is one of the many reasons there are fewer and fewer IPOs each year.