Investment funds are very active in acquisitions at the moment, in almost every sector of activity and type of company. It is a question of knowing them and understanding their investment strategies.
Behind any business activity there is a process. From innovation, production, sales process or after sales service. Without an excellent definition and execution of each step defined in the process, the result will not be the expected one.
So, or even more important as we do not usually sell many companies in our professional life, any sale project must have a process. Definition of the strategy, adequate documentation, search for investors, first contacts, negotiations, signing of initial documents, negotiation of the sales contract, closing and post-acquisition strategy. Skipping any of these steps will entail a risk of not achieving the expected objective.
Chances are there, but they are remote. The best way to sell a company is to be active. If to sell a product or service of our company we invest all the necessary resources, to sell the company should not be different.
On the one hand, not all potential buyers of your company have the strategic objective of making purchases at the time we decide to sell the company. We must arouse the interest of all potential investors. It is key not only to address our potential buyers, it is also very interesting to develop a good database of companies that may be interesting for their complementarity. Likewise, at AddVANTE we understand that contacting international companies is key. The added value of this can be very important. Our international experience and specific expertise in Asian markets are a clear added value.
Likewise, the opportunity to find a financial investor should not be ruled out. Investment funds are very active in acquisitions at the moment, in almost every sector of activity and type of company. It is a question of knowing them and understanding their investment strategies.
The ultimate goal is to be able to create competence during the process to obtain the maximum value possible.
To value the company for its history, trajectory or its brand, but above all for its positioning and future. Making an assessment before starting the sales process is key.
Investors do not buy companies because of their history but above all because of their ability to generate future cash flows. It is necessary to develop financial models to make the company attractive, but from a realistic point of view. We use the most appropriate valuation methods for each project and take into account the characteristics of each investor.
At AddVANTE we detect that there are basically three types of logic among potential investors. The purely investment logic that is developed by those who seek opportunities at low prices to achieve quick returns. The financial logic developed by those investors who seek returns via improved financial statements and, finally, and perhaps most commonly, the business logic. Those investors who believe that they will obtain synergies via an acquisition or that they will be able to improve or change part of their business with the ultimate aim of creating added value.
Based on the fact that a company when entering into a sales process cannot and should not lose its focus on the business; we believe that the continuous support of the advisory team is fundamental. From the initial stages of marketing, negotiations and especially during the final phase of due diligence and negotiation of the sale contract. The availability of time, focus and experience is a degree in any M&A process.