A strategic sale can garner the maximum price for a business and is top of mind for many business leaders. According to SunTrust research, sixteen percent of business executives plan to sell or merge their businesses with another firm, and another twelve percent are considering a transition with strategic sale as a possibility.
By finding the right acquirer, identifying valuable synergies and closing a sale, business leaders can capture not only the financial returns from a business, but also gather additional value from the synergies two complementary businesses can generate.
Understanding strategic sales
Business sales typically fall into two categories, financial and strategic. Financial sales focus on a company’s financial returns, starting from a baseline of historical value and considering growth and margin improvements to ongoing cash flows and capital gains. Typically, these transactions are the realm of the private equity investor (link to PEG product sheet), although there are diversified companies who look to invest in this manner as well.