How a Higher Price can be Achieved when Selling Your Business

Multiple Bidders

In a recent Deloitte survey of executives the most common reasons selected as to how a higher price can be achieved when selling your business was to have multiple competing bidders (44%). Other factors include strength of the management team, their preparation and ability to convey the company goals and objectives (40%). No surprises during due diligence (32%) is extremely important and would naturally ensure the price was not negotiated down. Greater than expected synergies (36%) lead to an improved outcome and readily available and accurate financial information and analysis was also important.

Deal Structure

The best deal is not necessarily the highest price but is a balance between risk and reward and matching what the sellers particular needs are. The survey did identify that the most common form of sale was all-cash while other terms commonly accepted were the seller continuing with a limited equity interest in the buyer.

It was also a pleasing surprise to find that 85% of sellers were satisfied with the value of their most recent divestiture with 68% of surveyed executives report that they received the value expected and 17% walked away with a price that exceeded their expectations.

Good Preparation is How a Higher Price can be achieved when Selling your Business

The key to how a higher price can be achieved when selling your business is to ensure that the business has sound operational procedures, strong and capable management and is ready to be sold. It is also vitally important to have a well-managed and executed business sale program, attracting multiple bidders, using professional document management data rooms and ensure there are no surprises.  This will also assist in shortening the deal time-line to completion including a the benefits of a reduction in due diligence and burden on the sellers staff.