change direction. Furthermore, most confidential
information dates very quickly. On the positive side, you
will be more knowledgeable about your business at the end
of the process.
There are good reasons to retain an adviser to guide and
protect you. Choose someone you like and trust; this will
be a close working relationship for several months and
your advisor may be the only person who knows what is
going on; who will understand your concerns; who knows
the buyers; and, more importantly, knows the decision-makers. An adviser should manage the process with a clear
structure and timetable, and will leave you free to run your
business. It is the seller’s role to make sure the business is in
good shape, that the forecasts are met, and that the
company is run in a consistent way.
The deal business is all about people and relationships.
People, their strategies and ambitions, drive deals. You
need to be committed, and it should be an interesting, even
exhilarating process. It represents change, and heralds a
beginning as much as an end. ■
difficulty surviving; those that thrive often have taken
private equity investors, and the founders may own only a
small, if valuable, stake in the business.
The professional sector is different again. Increasingly,
corporations and the professions–medicine, law, science,
These are markets dominated by large corporations.
Other valuation drivers
Other valuation drivers include financial performance
(growth and future growth), competition, barriers to entry,
management and staff, technology and rights. Is it easy
for someone to enter and steal your market or are you
embedded? Is there obviously more to come? It is always
best to leave something on the table for the buyer.
Are there risks in trying, but failing, to find a buyer at
your valuation? It will be disappointing, but in a well-managed process it is unlikely to be damaging. Your
obvious buyers, usually large companies, are unlikely to
Kit van Tulleken, Founder Partner of Kit van Tulleken LLP, is an
independent strategic adviser to publishing and data companies in the
UK, Europe and the US ( email@example.com).
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