A buyer who can strategically enhance the value of his enterprise by capturing another company's market share, proprietary technology or other strategic advantages will be willing to pay a premium to make the acquisition. Indeed, this desire to gain strategic advantage through acquisition and to prevent competitors from doing so is one of the drivers of consolidations within an industry. Today represents the best of all worlds for the sage CEO who recognizes our current environment as one of unique opportunity, brings his best skills to bear to prepare a company for sale, engages talented professional advisors, and reaps tremendous rewards for his efforts. However, the path to reaping these rewards, once the decision is made to sell, is not without peril. The courtship and negotiation of a sale must be handled with the utmost privacy.
Competitors are quick to use the news of an impending sale to damage a company in the marketplace.
Or just as damaging, rumors of a sale can leave your sales and executive ranks ripe for the picking, putting a dent in revenues and earnings. Likewise, the knowledge of a pending sale can de-focus management and operations and adversely impact performance. These risks can be mitigated with proper planning and quality advisors. Proper planning means being very sure of one's decision to sell and then continuing to run the business as if you were going to be there forever. Putting together a quality team comprised of experienced investment bankers, legal counsel and auditors is key.