Selling a company is always a difficult decision. At ROI we recommend that you speak with a member of our M&A team one to five years before you wish to exit. We can provide a base line of value and a road map to get to where you want to be when you sell. While fives years is better than one year. Much can be done, even in a year, to improve value.
Then the choice becomes when to sell, to whom and do you sell all or part of your firm? There are many options and we can help you in deciding what is right for you.
When to sell?
Have you reached the right value? Will you want (or need) to stay on for a year or two or more? Is the market right? Is the company well prepared for top value?
Who do you sell to?
ROI can help you sell to a key employee. Often there are many advantages to this if the right person (or team) exist within the company. We can also assist in selling to a synergistic or strategic buyer. Often these buyers will compete for your company and offer the most in value. Sometimes an individual or small group of investors can be the best suitor. While these buyers tend to pay a “financial” value, they also tend to keep on the majority of employees and maintain the company in the same location. Each type of buyer has advantages and disadvantages. ROI can help you best understand what options could be available for your firm.
Selling only a part of your company and the rest later?
A tried and true exit strategy is selling a portion of your company (usually a 70-80% share but sometimes less) to an investment group with deep pockets. The owner than can stay on as CEO and have two advantages. First, you secure your future with a substantial liquidity event when the first sale occurs. You then get to grow the business with a strong board of advisors and more capital. After a predetermined period (typically 5 years or so), the potentially much larger company can be resold and you cash in the ownership you had retained. This second bite of the apple can sometimes be more than the first sale in proceeds for the former owner. We would be happy to discuss this and other options with you at a confidential meeting.