We recently hosted our latest in the series of selling your business webinars which looked at acquisitions from a buyer’s perspective, exploring the things acquirers focus on and the work they carry out when assessing a potential acquisition. There is evidently a lot for business owners to think about when preparing their businesses for sale, but what do buyers find most important when considering an acquisition? Are you confident that your business is attractive to a buyer and that you are set up for growth?
We spoke to Barrie Brien, CEO of STRAT7 and Simon Rhind-Tutt, Founder of Relationship Audits, to get their perspectives as to what buyers prioritise when evaluating an acquisition opportunity and why, deriving insight from transactions they have recently been involved in. Watch the webinar now or read on for our summary of the five most important considerations for buyers.
“I need to make sure the chemistry is not only good at the selling company between their management team, but also that the chemistry with our management team is really strong.”
Barrie Brien, CEO of STRAT7
“Trust and organisation are most important. Everybody wants the deal to go through as quickly as possible, so being organised and devoting time to preparing for the preparing for sale is key.”
Simon Rhind-Tutt, Founder of Relationship Audits
1. Good strategic fit
Buyers need to be confident that the businesses they’re looking to acquire have similar focuses and aspirations for growth. Often they will look to make an acquisition that bolsters their existing offering. As a seller, you need to demonstrate that you can bring something valuable to the acquiring company and align with their goals and values.
2. Culture is key
Chemistry and ambition are critical to success. Buyers want to see that those in your management team get on, have a clear vision for the future of the business and are committed to making it happen. There needs to be healthy interaction between your team and the acquirer’s team, to build up a high level of trust, align goals and create a platform for innovation and opportunity.
3. Clear growth strategy
Buyers want to invest in potential. As a seller, you must demonstrate that you have a robust growth plan in place. What is your strategy for retaining existing clients? How do you go about winning new clients? Are you being innovative in the development of your product or service offering? Do you have ambitions to expand internationally? Acquirers want to know how they can help your business grow, but there needs to be a strong starting point.
4. Robust financials
Make sure your books are in order as this will save a lot of pain in the long run. Buyers want to get deals done quickly and smoothly, so having an efficient month-end process to deliver up-to-date financials throughout the process is crucial. Invest in good advisers who will help you get your accounts and processes into a good state and provide any necessary tax advice in a proactive manner
5. Ability to attract talent
There is currently a talent war going on. Businesses are finding it hard to attract good candidates and there is a general shortage of skills across many industries which is proving a barrier to growth. You want to assure your buyer that your employees are happy and that you’re doing all you can to recruit the best talent. Happy employees are your best advocates and motivation and passion are contagious. Take the time to find out what they really think and address any issues that could be a cause for concern for them and your future employees.
If you’re thinking of selling, talk to our team of corporate finance advisers today.