Why selling to strategic buyers is an optimum strategy

By Kempten Schwab

Organizations are driven by creativity, innovation, and expertise, which means they provide value that far exceeds the cost of their products and/or services. A strategic buyer is by nature, not restricted by the same constraints of financial buyers.  They seek integrated ways those organizations could fit within their existing operations; thus making acquisitions based on what’s best for their long-term stakeholder value.

In my experience, I’ve found that sometimes a strategic buyer doesn’t even know they’re going to make an acquisition until we bring the opportunity to them. We put together a business plan — a creative concept — that a strategic buyer might not have thought about, and we show them what they could achieve by acquiring our client. It’s about creating that “a ha moment” for the strategic buyer and getting them excited about the possibilities. When you understand the integrated value of your organization — or what your business is actually worth to someone else — you realize it’s far more beneficial to work with an expert like STS to guide you through the creative exit process.

STS can help maximize the value of your business by finding the right strategic buyer, instead of someone who is just going to look at your Profit and Loss statements and acquire for purely financial reasons. We help the buyer and seller understand the DNA of an organization — its true core competencies and strategic value — and then help integrate that DNA between the two sides, creating a positive outcome for both parties.

For any entrepreneurial business owners that are looking to sell to a strategic buyer, here are my top 3 things to remember.

  1. Humble yourself and be prepared for someone to look at your company in a totally different light, positive or negative. This is what I like to call shifting the lens.
  2. Check emotions at the door. Remember, it’s not personal, it’s just business.
  3. Set your preferred and required outcomes. What are the key components of the transaction for the exiting owners before transitioning – these go beyond financial. If you know you can meet and exceed these goals, it’s probably a really good decision to commit to the transaction.

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