Merger and Acquisition strategy, Shore-up the fundamentals of your business to gain maximum value

Why sell your company and leave untapped value for the buyer? Value that you can realize by making some of the predictable improvements that a buyer will make, but do it before you sell. Develop and implement initiatives to address the gaps and weaknesses uncovered by a SWOT.  This step can create a significant premium in value for the average business. Keep in mind that making performance improvements takes time, so plan ahead.

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Valuations Moving UP

According to GF Data Resources, which tracks private equity deals ranging in value from $10–$250 million, enterprise valuations across that size range averaged 6.0X in the third quarter of 2010, and even the smallest size subset ($10–$25 million) reached an average of 5.8X EBITDA. These were pretty much A grade businesses with all their ducks in a row, however the trend is definitely upward. Private Equity as well as Strategic Buyers are sitting on a lot available, non working cash and credit markets are again aggressively soliciting deals. The result is that making a deal will be a lot less discriminating and the B grade business’s  will definitely see their values rise above the distressed pricing of past couple of years.