A Sale on the Horizon?
Preparing to sell a business? We have identified the situations that represent ideal times for you to consider exiting your business.
Moving on to other projects or retiring
The classic reasons to sell, it may just be that time for you. It’s important to not wait until the business stagnates or is in decline. Planning for retirement or moving on never starts too early, and once you decide to go ahead, it always takes longer than you anticipated.
Joining a larger organization to get your company to the next level
You may have a product line that could do well in an overseas market, or a new technology that could generate significant sales in a new vertical, but you don’t have the financial resources, the brand recognition, the boots-on-the-ground capabilities to enter a new geography, and so on.
Capitalizing on favourable M&A dynamics in your industry
You may observe that deal-making is starting to heat up in your industry, with strategics and private equity showing unusual interest in acquiring market share, new technologies, talent, etc. Prices tend to rise in these circumstances, and you may consider an exit during these auspicious times.
De-risking: share some of the risk with new ownership
It may be time to consider selling a majority stake in your business to a buyer who can participate in and even lead the growth of the business, with your continued support, allowing you to “take some chips off the table”, and diversify your assets for you and your family.
Addressing an unsolicited offer from a potential buyer
You have received interest from one or even a few buyers. Buyers try to move in on targets on their own, as to avoid an auction in which they’d have to compete. Addressing that offer on your own carries a significant risk of leaving dollars on the table.
What we look for:
- $5 – $250m in size (revenues), though we have advised exceptional companies as small as $1m
- Cash flowing for traditional businesses; for businesses in emerging sectors that are not cash flowing, value to strategic buyers must be evident
- Late-stage growth or well-established companies (we avoid pre-revenue start-ups, or distressed situations)
- Active in industries where M&A is occurring (we avoid resource extraction, pharmaceuticals and life sciences)
- Have compelling and differentiated product or service offerings
- Have a solid management team in place, especially if the owner(s) is retiring
- Have a strategically sound reason to exit
From the archives: May 2017
How Do You Prepare For A Sale of Your Company?
Every entrepreneur must eventually transition out of their company. There are two exit paths (liquidating or selling), which can take various forms: selling off…
FirePower was engaged to prepare PrintFleet for an exit to strategics, and guide the company through to closing. Four weeks before closing, the buyer with whom PrintFleet signed an LOI following a competitive auction, a Japanese Fortune 500 company, terminated the deal because of an internal reorganization. Far from giving up, FirePower re-ignited conversations with a Texas-based strategic who had done well in the auction, and closed without any major challenges at an attractive price, terms and conditions.
Applied Comfort is a designer and manufacturer of non-standard HVAC systems for commercial, industrial and institutional facilities. FirePower guided the company in its search for a strategic partner, concluding a transaction with a UK-based strategic, with a complementary product portfolio and distribution capabilities.
Mass Spectrometry – Confidential
FirePower generated advised on the sale of an analytical chemistry instrumentation maker, with a strong commercially validated IP portfolio, to one of the most respected names in the sector.