This seems to be a high season regarding valuations in the ICT industry. We have had many deal closings during the last 18 months, and there will be more announcements at the end of the year.
Is now the right time to sell your business?
That’s one of the most challenging questions regarding M&A. Moreover, no one knows the correct answer. When we look back, we can evaluate whether it was the right time – but by then, it’s too late.
If a company is performing well and growing, most likely it will attract interested buyers with enough cash in hand. If a company is not doing well financially or if it occupies a technology niche in a decreasing market segment, it’s usually the opposite case. These companies have difficulty finding a new owner.
In short, now is a perfect time to obtain a valuation of your business and discover potential buyers. And if you do it now, you won’t later regret not acting.
The real value
The second question, or often the first one, is: what’s the value of our company or business unit? That’s not a difficult question for us. It is one of the questions we will answer precisely for our customers.
To answer, we do the valuation math and check the closed deals in that specific industry segment. What we have as an outcome is an indication of the real value.
The fact is that we only have real value when we have actual offers on the table. That’s the value we call the market price of a company.
The market price will be different in the future, and it probably would have been different in the past, too.
That fact is that sometimes the value is higher than the owners expected and sometimes lower. If the latter, the owners should evaluate their expectations in light of the hard facts. The more prepared the company is, the easier to accept the facts and make a rational decision.
If the owners are entrepreneurs, the risk is that their decision-making path will cause strong mixed emotions, and they may not accept the hard facts, especially if the offers are not what they expected.
There is a risk in following a possible wrong decision: the markets for their company may get even worse, causing further loss of more value and time. You never know about the future, but for sure, the timing today is pretty good.
Finding the facts
If you want to test how valuable your company or business unit is, we are happy to tell you more about our experience and how we could help you find out “the hard facts” about your business.
On top of learning the market value, you will get other valuable information about the market you are operating in.
Our approach is unique because it adds value to the shareowners without pushing them to decide when they are yet not ready.
If you are interested in finding out the value of your business, let’s talk.
Then you can decide if now is the right time to sell.
Views on acquisitions
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