Articulating Strategic Assets to Improve Your Business Selling Price (a short video)

Click Here to Watch our Short Video          The Key to driving strategic value in the sale of a technology company is to move buyers up from their starting price based on a conservative Cash Flow multiple. As a seller, you must first earn your strategic value by building a great company. In your business sale, that must be captured and articulated in a competitive M&A process in order to unleash your optimized selling price.  In this series of videos we will present 7 factors that we use to drive maximum strategic value.

We try to assign values for miscellaneous assets that the seller is providing to the buyer. Don’t overlook the strategic value of Blue Chip Accounts. Those accounts become a platform for the buyer’s entire product suite being sold post acquisition into an “installed account.” It is far easier to sell add-on applications and products into an existing account than it is to open up that new account. These strategic accounts can have huge value to a buyer.  This dynamic works both ways. So if our client's software is a good companion product to the buyer's other products, then there is a natural open sales channel to sell our products into their install base.

There are many strategic assets that good companies develop in addition to their intellectual property and their customers. They may have highly skilled staff that are coveted by a buying company.  They may have a valuable regulatory advantage or a security clearance that the buyer values.  Expertise in sales systems, distribution or social media can also be leveraged by the larger company. A scalable business model is also highly valued as a strategic asset. Providing entree into an exciting new growing technology or even a new geographic footprint can produce strategic value. The key is to recognize that you have pockets of strategic value throughout your company. Make sure those assets are articulated by your advisors and recognized by the buyers.

The value of your company goes well beyond the bottom line. We want the buyer to consider the potential value creation of your assets in their hands post acquisition and to base their price on this view, not your 5 X multiple of EBITDA.