The sell side is just one part of the incredibly enriching and complex ecosystem of Mergers and Acquisitions (M&A). Explaining every aspect of this industry could fill an entire book.
Therefore, in this series of posts, I will succinctly break down the most relevant points of M&A.
Text by Santiago Vieites, M&A Associate Latam at Pipeline Capital.
Today we focus on the Sell Side
The sell side is a fundamental part of M&A. We will explore what it entails and the advantages of selling your company.
Sell Side: Selling your company is a significant step
Selling a company is never easy, especially when the entrepreneur has put so much effort into creating and growing it. Recognizing that you are selling the project of your life is a big step.
M&A involves not only the owners or shareholders but also employees and customers. Therefore, it’s crucial to find a buyer who aligns with the company’s interests and operations.
6 reasons to sell your company
There are many reasons to sell a company: wanting to pursue something else, growing inorganically, receiving an attractive offer, among others.
At Pipeline Capital, we want to ensure that the entrepreneur gets the maximum benefit from the transaction.
1. Financial strengthening
A company with financial problems can find in M&A the solution to its debts or secure its financial cushion thanks to a larger structure that supports it. A buyer can also provide the necessary funding to invest in growth.
2. Adaptation
Because of the M&A, a company can survive new challenges that it would otherwise not be able to overcome.
3. Value maximization
When sold, a company can maximize its potential thanks to a larger buyer that exposes it to new markets and better clients.
4. Brand recognition
Being acquired by a larger company can increase the brand’s popularity in the market.
5. Strategic optimization
The new company will seek to optimize both operational and administrative capacity to generate the greatest possible benefit.
6. Reducing the financial risk of founders
Many founders have a large portion of their wealth concentrated in the company’s shares. Selling a part of them allows for personal wealth diversification.
Important point in the Sell Side
The owners of the company for sale aren’t necessarily obliged to leave.
There is a possibility that the new owner wants them to continue running the operations, even though they are no longer the majority shareholders.
Text by Santiago Vieites, M&A Associate Latam at Pipeline Capital.
Originally published on LinkedIn.
Read more articles about M&A:
- What to expect from the Due Diligence process in M&A?
- What is an M&A process?
- How can strategic funding boost your business?
- The role of M&A advisory in selling your company
- The benefits of selling your business to a larger company
- Digital Transformation: How M&A is guiding traditional companies to innovation
- The perfect prosperity formula for a software company
- Using M&A to enter new markets or acquire new technologies
- Corporate governance as the central strategy for success in M&A
- Risks in M&A: Key risks and how to identify them
- Myths and truths about selling companies
- M&A in the technology sector: Challenges and opportunities
- 5 most common mistakes when selling your company
- 5 common mistakes when selling your company – part 2
- Efficient prospecting in M&A – by Santiago Boher
- Exploring the cost of capital – by Rafael Vavrik
- Brands and M&A – by Alon Sochaczewski
- M&A market is like a movie – by Alon Sochaczewski
- M&A shows positive trend, which should consolidate – by Alon Sochaczewski
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