A smarter exit strategy

Don’t chase the bid 

Any auctioneer worth their salt will tell you that ‘you don’t want to chase the bid’. Why? Chasing a buyer puts you at a strategic disadvantage. If a buyer initiates the enquiry, you’re in a better position to negotiate a more desirable outcome. Also, when you chase the sale, you send implicit negative messages about your confidence in both the business and your longevity and true value. 

Business as usual 

Business as usual seems a strange strategy, but from our experience, it seems to be one of the most effective exiting strategies. We have guided heavy industry, architectural specifiers, and software businesses towards successful and highly lucrative strategic acquisitions. The trick has been how we used a marketing strategy to imitate the enquiry and drive up the valuation. In each case, after the implementation of a successful branding and marketing strategy, clients have been scouted for strategic acquisitions with outcomes exceeding their expectations. 

Why does this approach work? 

The path to growth for many larger organisations is through diversification or the acquisition of a perceived competitor. In both cases, a strong and confident digital presence is the first step in discovery. In one case, we had a third-generation family business with unique industry technology. The business owners approached us to create a website, and as part of the discussion, we introduced the idea of an exiting strategy. On completion of our marketing strategy, the business saw an uplift in business almost instantly. That new business led to a strategic acquisition by one of the world’s largest engineering companies. We have driven similar outcomes from one of the world’s largest accountancy firms and glass companies. In each case, these companies were initially unknown to the acquirer until we implemented our strategies. 

The value of intangible assets 

Your brand is considered an intangible asset. So is your website and social presence; however, few potential purchasers are interested in targeting such business…unless they are looking to pay well below market prices. Increasingly the value of a business resides in such intangible assets. These assets are the public face of organisations. They represent both a brand promise and its performance. Investing in these assets prior to an intended strategic acquisition is not a cost; it's an investment. It's an investment that is attracting suitable types of potential purchasers. It's an investment in brand equity and IP that, unlike a plant, continues to appreciate over time. It's an investment with a higher yield, with a lower risk.  

Exit timelines 

Exit timelines can be years, especially if you want a good return on your investment. In some cases, it can be months. Whatever the outcome, you need to prepare and implement a strategy for becoming a target for acquisition well before you need to prepare the paperwork. The best approach to acquisition is to demonstrate confidence in a future where your business is more connected and has a clear growth and expansion strategy. To a competitor, this makes you appear a more significant threat and provide extra incentive for acquisition. To a company looking to diversify, you demonstrate a market understanding and confidence they may lack and wish to acquire. No matter what the purpose of acquisition or who the purchaser is, your strongest card is how you are perceived.