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The martinwolf team tracks noteworthy mergers and acquisitions, and offers
commentary on issues that impact our industry.
Hiring an M&A Professional to Sell Your IT Business
The For Sale By Owner (FSBO) movement in residential real estate gained momentum in recent years based on the availability of online resources and data. FSBO allows homeowners to sell their properties without engaging a traditional real estate agent, potentially saving on commissions. However, data suggests FSBO sales typically result in lower sale prices and longer time on the market compared to listings represented by real estate professionals, highlighting the complexities and challenges of navigating the real estate market without professional expertise.
Similarly, when considering the sale of your IT services business, you may be tempted to rely solely on the power of technology, such as Artificial Intelligence, to search for potential buyers. While these AI tools can certainly be useful toward identifying acquirers, they can’t replace the value of an experienced M&A professional.
Using an M&A professional to sell your IT business provides a range of benefits to help achieve your objectives and ensure a successful transaction.
One of the primary benefits of working with an M&A professional is achieving a higher valuation. Intermediaries bring a deep understanding of the M&A landscape and have relationships with a wide range of potential acquirers. This means they will position your business in the most favorable light, identify the right buyers, and bringing in a deal attorney to ensure the best possible deal structure and price. This expertise and network results in a significantly higher valuation.
Certainty to Close
Another key advantage of working with an M&A professional is a greater certainty to close. Intermediaries help manage the entire sale process, from preparing marketing materials and identifying potential buyers, to managing key inflection points along the way. This ensures issues are identified and addressed early on, reducing the risk of the deal falling through. Intermediaries also have the experience to anticipate and manage issues that may arise during the sale process, increasing the likelihood of a successful outcome.
One of the primary benefits of working with an M&A professional is achieving a higher valuation for your business.
Managing Your Business
Selling a business can be a time-consuming and distracting process, particularly if you are trying to manage it on your own. Engaging an M&A professional frees you to focus on running your business and ensures it continues to perform well during the sale process. It’s incredibly important to hit financial targets to achieve the valuation you are seeking. An intermediary manages the sale process on your behalf, leaving you free to continue driving performance.
Knowing What Buyers Need
M&A professionals bring a deep understanding of what potential buyers are looking for in an acquisition. They identify areas where your business may be particularly attractive to certain types of acquirers, and position your business accordingly. They also provide valuable insight into the types of deal structures and terms most attractive to buyers in your industry, helping achieve the best possible outcome.
Finally, managing a transaction can be incredibly time-consuming. Engaging an M&A professional frees you to focus on other important areas of your business, or simply to take a break from the day-to-day pressures of running a company. Intermediaries bring a wealth of experience and expertise to the table, which helps achieve your goals more efficiently and effectively than you would be able to on your own.
An intermediary manages the sale process on your behalf, leaving you free to continue driving the performance of your business.
While the power of technology like AI can be useful in identifying potential buyers, the value of an experienced M&A professional cannot be overstated. Engaging an intermediary results in higher valuations, greater certainty of closing, the freedom to continue running your business, expertise in knowing what buyers need, and a significant time savings.
Original article can be found here.