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

 

Market Insights
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…

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Case Studies

Decisive
Decisive Technologies is a value-added reseller of IT hardware, and BriteSky Technologies is a Canadian, managed cloud services provider (collectively “Decisive”). After five years of successful organic growth, Decisive needed additional capital to accelerate its expansion plans. The shareholders were adamant that a new investor should have values and a vision for the company that aligned with theirs, and FirePower was engaged to find an investor and negotiate a deal structure that met all of the shareholders’ objectives.

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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.

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Versature
Versature is a rapidly growing Canadian VoIP service provider. Previously, the company had been through an unsuccessful sale process with another investment bank, but decided to work with FirePower after receiving assurances about how the sale process would be run. FirePower’s Investment Banking team crafted a story highlighting Versature’s strong growth story, brand, people and processes. The most compelling offer came from net2phone, a subsidiary of US public company, Under new ownership, and with expanded access to capital, Versature is well-positioned to accelerate its growth trajectory in the Canadian market, and collaborate on initiatives within IDT abroad.

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We have been extremely impressed by the efforts of FirePower Capital in helping us identify a partner the team is excited to join forces with. Their support in managing the entire M&A process let our management team focus on building the business rather than being over burdened with getting the deal done. We sincerely thank FirePower for their hard work.
Alkarim Nasser, President and Founder of BNOTIONS