Acquirers of a company make their plans based on the potential of a company. They see possibilities for the future. But they pay for existing value. They must consider the debt structure, the earnings, the ability to service debt, and the ability to compensate both the investors and the necessary staff.
The transition period is critical. An acquirer must be comfortable that a company is stable and that results will continue during the transition and under new ownership. Redefined styles, cultures, results and roles must be successfully addressed. Many businesses have one or more key players without whom the business could suffer. A company should plan business continuity in the event a partner is suddenly out of the picture.
Planning for optimizing the value of a company in the view of an acquirer depends on the plans and goals of the company owners. If the likely scenario involves acquisition by an equity firm, traditional measures will determine the likely value:
- Considering potential value, and time frames to achieve enhanced value
- Refining balance sheet
If the company is more likely attractive to a strategic buyer, there will be more emphasis on the status of key products and services.
- Protection of intellectual property
- Stability of key staff and management
- Concentration of suppliers and customers
If the company is more likely to be passed to family members, the transition is critical.
- The role of previous owners in the new operation
- Clarity of decision making, especially in stressful times
- Continuity of key resources
Aetherian works with business owners to maximize value, for the seller and for the acquirer. We work to recognize where opportunities exist, and where vulnerability could undermine an acquirer’s results.
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