Exit and Growth Strategies for Middle Market Businesses

Prospering in a Soft Market

By Kim Levin | Jun 30, 2008

A former partner (and highly successful serial entrepreneur) taught me that the two best ways to prosper in a slack period is to feed your winners and cut your losers. Year-to-date 2008 trends in global mergers and acquisitions (‘M&A’) reflect this; corporate ‘pruning’ is very much in evidence today.

How can this benefit you? Several ways, if you act aggressively:

  1. Divestiture of ‘Non-Core’ Assets:
    This is a particularly good time to escape the accumulated time-wasters, by selling them at reasonable prices and terms, either in the US or abroad. This will allow your management team to focus. Cut your losses—stop wasting precious manpower and money.
  2. Sale to International Acquirers:
    The weak US dollar means offshore buyers now recognize American M&A is a bargain. You can achieve a full and fair value at favorable terms if your advisor knows how to (i) access strategic buyers, (ii) capture their attention and (iii) hold it long enough to properly showcase your business.
  3. Strategic Acquisitions:
    This is a great time to acquire technology, product lines, extend geographic reach, customer lists, etc., on favorable terms if you can fund the deal largely from generally available corporate funds.
  4. Create Your Exit Strategy:
    With day-to-day activity softening, this is a perfect time to craft, adopt and begin to implement a carefully coordinated, value maximizing exit plan. A professional M&A advisor would be pleased to discuss this with you, begin to identify an action plan, do a preliminary valuation as your benchmark, and provide additional consultative input, all at no cost to you. The actual exit process could take several years, so it is never too early to start.

One Response to “Prospering in a Soft Market”

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