I never thought I’d be quoting Carl Jung in describing a sell-side mandate. But I will. Selling a firm is all about synchronicity, which Jung described as “meaningful coincidences”. Three years ago I wrote a post entitled “How hunger and hygiene drive valuations”, what I should have addressed is how do you create synchronicity in a transaction?
At beaton about half our time is spent working for sellers and half for buyers – for different transactions of course, we pride ourselves in avoiding conflicts of interest. Over the past few years our sell-side transaction work has put us face to face with well over 100 potential buyers and an equivalent number of buy-side strategies. The transactions that have been a win-win for both seller and buyer have been those of “meaningful coincidence” in the following areas:
- Leadership – buyers recognising that they need additional leadership to complement their existing team as they expand.
- Brand permission – buyers recognising they don’t have what it takes to enter a new market, be it leadership, connections or credibility.
- Capability and excellence – buyers recognising that they need specific additional skills and expertise that the market readily accepts.
- Scale – buyers seeking scale to make an immediate impact in a target market, and justify the time and expense of undertaking the transaction.
- Fit – buyers seeking a cultural fit that empowers all sides and does not repel.
As you would expect with synchronicity, timing either creates or closes the window of opportunity – for both sides. This is where research and deep industry knowledge comes into play. This is why larger companies or firms seek to acquire boutique specialists. Well, so it is with transactions and transaction advisors. Transaction advisory is not about size it is about knowledge, continuous research and continuity of focus.
We have found that it is the quality of research in identifying and qualifying potential acquirers that makes the difference. The old saying that you can make your own luck applies equally well here – you can create your own synchronicity from a deep understanding of a market and its players. It then comes down to the sell side to make the call; the risk here is that they leave it too late. So as I have advised many clients – start the process early to remain in control.
Other related blogs and thought leadership from Beaton Capital can be found here:
- Valuation and price are not equal
- Selling the firm – does size matter?
- 20 questions to test your resolve: do you really want to sell your firm?
- Takeaways from a recent sell mandate – points to consider when it comes to selling your firm
This post was written by Warren Riddell of beaton. Warren’s details can be found at LinkedIn.
Image – Carl Jung