Getting M&A Right: Your Exit Strategy

Getting M&A Right: Your Exit Strategy

April 17, 2024

Getting M&A Right: Your Exit Strategy

A successful company sale process requires careful planning and execution, beginning well before the business is put "on the market." Integrating sell-side M&A strategy into every stage of business planning is essential to a successful exit. In fact, studies show that companies that begin M&A planning earlier achieve higher valuations than those that start later.

Here are four key components for successfully exiting your business:

1. Be Prepared

Proper preparation is critical to easing buyer concerns and keeping the sales process moving along smoothly. This includes preparing for due diligence by gathering all necessary documents before you put your company on the market, identifying and profiling your ideal buyer type, and ensuring your business is as profitable and streamlined as possible. In fact, businesses that undergo a thorough pre-sale preparation process can see a 15% to 20% increase in valuation.

2. Build a Team Aligned With Your Goals

Selling a business is a complicated undertaking, and the buyer will likely have expert representation on their side. Hiring your own team of experts, such as the Marsh Creek team, is essential to level the playing field. Marsh Creek is affiliated with various organizations, including the Bristol Group, which consists of over 20 skilled advisors nationwide, to deliver a personalized, hands-on approach that caters to your needs. Studies show that companies that engage a professional M&A advisor achieve higher valuations and close deals more quickly than those that don't.

3. Focus on Running the Business

Hiring an expert sell-side M&A team empowers you to continue running your company while the sales process is underway. This allows you to keep the business competitive and profitable, which is critical to maintaining its value during the process. A loss of revenue or decline in EBITDA as you approach a sale can be catastrophic, so it's essential to have a well-structured exit strategy that enables the company to remain in a strong position.

4. Build a Competitive Sale Process

Your M&A advisors will run a competitive process that pre-screens buyers and identifies the ideal buyer profile. They will oversee the transaction and shepherd it through to completion as quickly as possible. A well-executed M&A process can increase the sale price of your business by up to 20%. Your team will also help you cultivate a list of back-up prospects should the original deal fall through. This tiered approach builds security into the process, and encourages buyers to keep pushing forward. Deals that lose momentum lose value. Your M&A team helps the deal maintain momentum from start to finish.

In summary, a well-planned and executed M&A strategy can significantly increase the value of your business and ensure a successful exit. As you interview M&A teams, ask what you can expect from the process, how much attention you will get, and how they ensure the deal is successful. The statistics show that a professional M&A advisor can be a game-changer in getting your exit strategy right.

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