When it comes to Mergers and Acquisitions (M&A), achieving an Extraordinary Exit should be the ultimate goal for every business owner.
You’ve built your company from the ground up, and now you’re ready for the rewards of your hard work. What if we told you that there might be hidden treasures within your business that can significantly enhance its value in the eyes of potential buyers?
At STS, we specialize in uncovering the real drivers of strategic value that make a business successful and desirable for other companies to acquire. We call these your “Rembrandts in the Attic.” This is a powerful approach that can maximize the value of your business when you exit.
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What are the “Rembrandts in the Attic” in M&A?
The origin of “Rembrandts in the Attic” comes from a true story, when a painting by the renowned Dutch artist Rembrandt Harmenszoon van Rijn was discovered in an unexpected place – an attic in a rural town in America.
If you were thinking about buying a house, imagine your surprise and delight in discovering that one of the homes you were considering had everything inside included. And imagine if this included a bunch of dusty paintings in the attic. As you sort through the paintings, you see one that seems to have Rembrandt’s signature in the corner. Thrilled, you bring in an appraiser from Sotheby’s who confirms it is, in fact, a genuine Rembrandt. If you’re the buyer, you will probably be motivated to offer more for this house to make sure you are the one who gets it. You recognize the true value of the acquisition.
Companies looking to buy other companies will react similarly if they see your Rembrandts. The importance of these value drivers varies among potential buyers. What may be invaluable to one may be much less so to another. For example, one might desperately need IP to remain competitive while another may be interested in the markets where the seller has already established a presence. Others may be looking to save time and resources by acquiring the seller’s complementary product lines instead of investing in research and development for adjacent markets.
At STS, we ensure potential buyers see and fully understand all the Rembrandts – the drivers of strategic value – your company possesses to achieve what we call an Extraordinary Exit™. We will create an auction among a group of motivated, strategic buyers who understand that integrating your company for the long term will be highly lucrative for them. It is this process that maximizes value for our clients.
Beyond the Balance Sheet: Unlocking Maximum Valuation
What happens when this approach is not taken?
We often see valuations suggested by the M&A industry running along a bell curve (see the graphic below). This traditional model can sometimes be misleading because it is generally based on a high volume of deals where the buyers are not strategic, often called financial buyers. Non-strategic buyers are adept at purchasing companies at a lower point on the curve and then selling them at a higher point a short number of years later, typically to strategic buyers. This practice aims for a swift return, often accompanied by the promise of a quick and easy transaction for the owner today and a ‘second bite of the apple’ when the eventual second sale to the strategic buyer occurs.
However, finding a strategic buyer on day one skips this process and immediately engages the strategics, generating the maximum return for owners today. There is no second bite of the apple. There is only one bite, and it is the biggest one.
Unlocking the hidden value within your company requires a meticulous and structured process. Our expert guides spend the time to learn every aspect of your business, from operations to intellectual property and customer relationships to market positioning. Their industry insights and experience allow them to unearth opportunities and assets that might have remained hidden otherwise, even to the owners.
Unleash Your Extraordinary Exit
In the world of M&A, pursuing an Extraordinary Exit is within your grasp. You’ve poured your heart and soul into building your business, and now it’s time to unlock its true potential. With our “Rembrandts in the Attic” approach, led by our expert guides, we empower you to reveal hidden treasures within your company. These treasures can elevate its value, attract strategic buyers, and ensure your exit reflects the genuine worth of your entrepreneurial journey.
“Uncovering the hidden value in a company is an art in itself. Our approach is akin to finding a ‘Rembrandts in the Attic’ – revealing the unseen, yet invaluable, to ensure an exit strategy that truly reflects your business’s worth.” Emphasizes VP of Operations Support, Paul Ormsby.
As you venture into the dynamic landscape of M&A, remember that your Extraordinary Exit is not just a vision – it’s an attainable reality. Take the first step today by contacting our team and let us guide you on the path to achieving your Extraordinary Exit.