For every dealmaking action, there should be an equal and opposite reaction.
The best private equity investors really do their homework on acquisitions. They know well in advance which deals they’re most interested in and do a lot of analysis upfront, often including meeting the management. When it comes to transaction time, they already have a clear view on the company’s valuation and growth prospects. This gives them the edge to move with conviction and secure a deal at the right price.
During this pre-transaction phase, potential buyers are forming strong opinions which impact the likelihood they make a bid and the price they’re willing to pay. This is also true of strategic buyers.
But this needs to work both ways. For every “acquisition-ready” deal in the sights of a private equity GP or corporate, there should be an “exit-ready” company in an existing owner’s portfolio.
While potential buyers are building conviction in this phase, sellers have the opportunity to help shape this conviction.
Leading private equity GPs are using this dynamic to their advantage, ensuring that their portfolio companies have a clear Equity Story well in advance of the planned exit timeline. This approach gives portfolio companies a clear and consistent narrative for all stakeholders. So, when potential acquirers do their homework in advance of the deal, they’re seeing the company presented accurately and in its best possible light – increasing investor interest and valuation.
Contact us if you want to discuss how equity stories can boost the valuation of your portfolio companies and get them exit ready in a competitive M&A environment: https://www.accellency.eu/contact-us/
You can read more about Accellency’s Equity Story for Exit Readiness (ESTEX®) methodology here: https://www.accellency.eu/publication/equity-stories-a-critical-tool-for-exit-readiness/
