There has been a reluctance to sell local businesses to global buyers. This hesitation often results in missed opportunities to maximize the potential value of these businesses. According to PwC, there are reasons for continued optimism about dealmaking in the technology, media, and telecommunications (TMT) sector. The positive indicators include advances in generative AI and other new technologies, increased certainty around interest rates, record capital to invest, and pent-up demand for dealmaking. This upward trend in global mergers and acquisitions (M&A) drives innovation, expansion, and growth.
For local entrepreneurs, the time is ripe to consider selling to global strategics to unlock access to larger markets and cutting-edge technologies to achieve maximum value for their businesses. For high-tech companies with specialized, scalable products or services, global markets offer more opportunities for growth and innovation. By recognizing these opportunities, entrepreneurs can align their strategies with global demand, strengthening their position in M&A discussions and ensuring long-term success.
This article explores the benefits and opportunities of engaging with global companies and provides insights on how local high-tech businesses can evaluate their readiness for M&A transactions.
Table of Contents
Understanding How to Approach Specific Markets
Key Steps to Prepare for a Global Sale
Opportunities and Benefits for Local Entrepreneurs and Buyers in the Global M&A Market
Understanding How to Approach Specific Markets
Entering global markets requires a tailored approach, beginning with an understanding of the target market’s specific needs and challenges. Entrepreneurs must ask themselves: which markets offer the greatest growth potential, and how does the business align with market trends and demands? Conducting market research, leveraging global networks, and working with advisors, like STS, who specialize in international business can provide the insights you need to make informed decisions.
Key Steps to Prepare for a Global Sale
1. GTM Strategy and Structure (Value of the CRO)
To position your company strategically, you should prepare a strong go-to-market (GTM) strategy. Partnering with an M&A firm, like STS, whose strategic professionals will take the time to deeply understand your business, what makes it unique and valuable, and position it in the strongest light possible to unlock your true potential value.
The presence of key partnerships with recognized industry players builds credibility and market relevance. In many cases, global acquirers are looking for companies that can complement their existing operations while opening new avenues for growth. A track record of working with leading companies can show your business has passed standards of quality and innovation, making it a more attractive prospect for a potential strategic buyer.
A key element of demonstrating your business’s readiness to scale globally is to consider reaching out to Contract Research Organizations (CROs). CROs bring specialized expertise in market research, regulatory compliance, and product development, helping you navigate new market entry strategies with precision. This level of preparation not only strengthens your position in the market but also signals to investors and acquirers that your business is primed for sustainable growth and scalability.
2. Ability to Support a Customer in Multiple Markets
Being able to support customers in multiple markets is a key competitive advantage for high-tech companies seeking global buyers. Businesses that can show operational flexibility, whether in product delivery, customer support, or localized marketing, stand out as ideal acquisition targets.
This requires more than just product quality, it involves showcasing a business model that is adaptable to different markets, regulatory environments, and customer preferences. Whether it’s through localization efforts, establishing international partnerships, or developing a product that has universal appeal, a strong global offering can position your business as a key value driver for a global buyer.
3. Market Selection for Best Sales and Margin Returns
Work with M&A professionals who have the expertise to identify global markets that offer the highest sales potential and margin returns for your business. Being industry-agnostic, STS Capital offers a unique advantage when selling to global strategic buyers. Unlike industry specialists, who may be constrained by their sector’s paradigms or face potential conflicts of interest, industry-agnostic professionals can uncover strategic acquisition opportunities that others might overlook. They apply best practices and innovations across various sectors and regions to create competitive bidding environments, leading to better outcomes. Entrepreneurs should focus on markets that align with their core strengths while offering growth potential. For instance, a company specializing in AI or cloud technologies might find that North America or Europe presents the greatest demand and opportunities for innovation.
Let’s look at the opportunities, immediate benefits, and tangible gains you experience when selling your local business to a global buyer.
Opportunities and Benefits for Local Entrepreneurs and Buyers in the Global M&A Market
- Increased Market Access and Expansion: The sale can pave the way for local businesses to explore previously inaccessible markets, unlocking new growth potential and expanding global footprints.
- Access to Global Networks and Resources: Entrepreneurs can leverage global supply chains, the latest technology, and expertise, positioning them for faster scaling and operational optimization.
- Global Collaboration and Innovation: Being part of a larger global ecosystem encourages cross-border collaboration, facilitating innovation, R&D opportunities, and co-development of new products.
- Diversification of Business Risks: Expanding into global markets through M&A helps reduce dependency on any one region, offering more security against local economic fluctuations.
- Higher Financial Valuations: Selling to a global company typically results in higher valuations and stronger financial positioning due to combined revenue streams and market influence.
- Cultural Exchange and Learning Opportunities: Global M&A fosters cultural diversity and offers new perspectives, driving fresh approaches and operational improvements.
Challenges and Considerations
- Cultural and Operational Integration: Integrating into a global company’s culture and operations can sometimes present its own set of challenges, requiring careful management to ensure alignment and continuity.
- Legal and Regulatory Considerations: Different markets have different legal and regulatory requirements that need to be navigated carefully during the M&A process.
- Maintaining Business Identity and Values: Ensuring the acquired business maintains its identity and values while integrating with a larger global company is essential for long-term success.
Example of a Local Company Selling to a Global Organization
Take the case of a local high-tech company with innovative technology and prominent industry-specific clients. The company was acquired by a California-based strategic buyer, a move that unlocked new opportunities to expand its technological capabilities, tap into U.S. and European markets, and significantly elevate its global brand presence. By demonstrating its readiness for global operations and its strategic value as a market disruptor, the company positioned itself as an indispensable asset, enhancing the acquirer’s portfolio and cementing its role on the international stage.
Conclusion
“Success in the global M&A market requires vision, preparation, and the ability to 
see beyond borders. For local entrepreneurs in the high-tech sector, the global M&A landscape offers opportunities for growth, innovation, and financial success. By understanding the importance of global readiness and aligning your business with strategic global players, you can position yourself to capitalize on these opportunities.” – Stephane Boisvert, STS Managing Director.
Entrepreneurs should leverage STS’s global network and strategic approach to maximize their business’s potential in the global M&A arena. STS’s process identifies the key business drivers that enhance your company’s integrated value, leading strategic buyers to offer multiples of its expected value. We will assess your business to determine the optimal time to sell, advise on the steps you can take to achieve maximum value, connect you with the most qualified strategic buyers from around the world and help you achieve an Extraordinary Exit.
