Swap Ratio Valuation

POTENTIAL ACQUIRERS

Many companies initiate the company acquisition process very late. It is usually only after the growth curve of their company has flattened or when their competitors have entered the market. By then, the value of their company would have lessened.

The most suitable time for acquisition is at the beginning stages of the growth curve or when the product is introduced in the market.  At this stage, CEOs, CFOs, and Corporate Development executives can initiate the discussion with the seller in the initial growth stages of the company. Once you start the acquisition process, you should establish relationships with potential buyers.

Such associations can be created via joint development agreements, private label agreements, or reseller agreements. Besides, companies engaged in series of acquisitions usually take it up for the long-term and planned gains, such as bridging a gap in their portfolio, developing new markets, or gaining enhanced interactions.

PARTNERS NEED

Most sell-side companies get a due diligence checklist from the buyer and only then consider how to offer credentials to demonstrate their company’s value. Instead, they should instantly think of ways to combine their information and decide the tools they would use to share their company’s confidential information.

It will give you some breathing space in the case of any exposed loose ends. Thus, the main aim of companies should be to prevent sudden revelations in the later stages of acquisition which might impact the valuation of the business.

VALUATION DRIVERS

To substantiate your companies valuation to the buyer after the acquisition, you should first understand what benefit your company will offer to the acquirer. Usually, the acquirers will be looking for the following attributes, and hence, you should concentrate on these qualities to come into the radar of prospective buyers who will pay the correct valuation for your business:

Robustness – market share, sales, team

Concepts – IP, patents, branding, trademarks

People – Investors, workforce, customer base, environment, media

Business rivalry – market advantage, implementation advantage, sector growth.

Thus, when the buyers notice that you are well-prepared for the acquisition, they will realize that you are in control of your business, and you are target-centric, and you have been planning for a successful transaction.

VALUATION DATA

Based on your internal team expertise, you may also engage a valuation expert to provide you a valuation and swap-related data and analysis. In most M&A dealings, the inclusion of valuation experts such as Valueteam can add a great deal of value to the transaction.

When looking out for valuation experts, you should choose who specialize in your industry and those with remarkable experience in similar dealings. Besides, whether your deal size is big or small, you can consider hiring valuation professionals with significant expertise to gain the most benefits from an M&A process.

We at Valueteam can customize our packages based on your deal size and valuation needs at the most competitive rates. Once you team up with us, you will notice that your M&A team will have a positive collaboration and that all team members will contribute significantly to the M&A transaction. Thus, your company will be able to get the best valuation.