Building Value


Acquirers often look for the following as value contributors. Consider them as ways to build value in preparation for partnering.

Ability to Leverage – buyers want to leverage your assets across as much of their customer base as possible to maximize their return on investment. Consider how different buyers would market your products to their customers.

Management team – acquirers look for management talent to help build their businesses. Acquisitions need to be managed and the ones most likely to do it are the entrepreneurs who founded them. At a minimum, a transitional management commitment builds value in the eyes of the acquirer.

Revenue Momentum – there is no substitute for market takeaway of your products or services. Revenue growth acceleration is a powerful value enhancer. It shows you are doing something right. A clear, well-managed sales program is essential to build this key metric. What can you do today to build more revenue creatively?

Profitability – this is a classic metric to succeed in. At the end of the day, profits tend to indicate some form of market success. While many mergers are driven by market positioning imperatives and the profits are believed to follow, there is no doubt that more profit leads to higher valuations. If you are not profitable, then the other value elements are more important, particularly market position or technology.