Takeover interest in UK companies has surged to its highest level in years, meaning that M&A now represents the best route for owners seeking a profitable exit. Against this backdrop, it is even more vital for owners to be prepared to capitalise on these opportunities.
Recent data has shown that the value of bids for London-listed companies so far in 2024 exceeds $78 billion (£61.6 billion), the highest figure since 2018. Falling share prices, combined with a stuttering IPO market, has seen a global recovery in dealmaking. This has also been boosted by the belief that interest rates have peaked.
Victor Basta (pictured above), CEO of boutique investment bank DAI Magister, emphasises that business leaders should closely consider how they can capitalise on the rebound in M&A, by identifying potential acquirers and adjusting their strategic positioning in order to make their business a more attractive target.
Basta commented: “It’s vital that founders and business owners take note of what is happening in the market and allow this to influence plans for the future of their company. There’s no point in pursuing an unreliable exit strategy or additional funding rounds without high conviction of considerable returns – right now M&A is arguably the most consistent and profitable option.
“Typically, the best exits are meticulously thought out and prepared for, which is why it’s important to lay out a clear route to acquisition from a very early stage. The first step is to identify a pool of potential buyers with clear synergies or strategic alignment who are capable of financing an exit.”
This groundwork, Basta says, can enable owners to “prepare a bespoke engagement plan for each buyer, to be carried out six to twelve months before any exit is expected to take place.” Basta adds that such a timeframe “may seem like premature engagement”, but can lead to a more successful exit by allowing stronger relationships and mutual trust to develop.
Basta explains that buyers “more than ever before [...] want to see a clear roadmap to profitability”, highlighting the importance of a strong business plan. He emphasises that financial models must be stress-tested well in advance of the business being brought to market, to ensure they will hold up to rigorous due diligence and not lead to the deal “falling at the final hurdle.”
Basta concluded: “Companies that prepare in the right way generally achieve higher prices when the time comes to execute an exit. In a period where M&A is establishing itself as the most profitable option, starting the process early is crucial for any founder seeking to maximise the value of a future acquisition.”
When preparing for an exit, a vital step is to ensure that the business is not overly-reliant on its owner
Find out more about scaling up a business prior to a sale process
Bring to the market this leasehold specialist car sales and servicing facility located in Horncastle, Lincolnshire. The trade was established as a limited company in 2005.
LEASEHOLD
The company is an online vehicle purchasing platform, providing a fast, hassle-free car-selling service for the end user. A competitor to the likes of webuyanycar.com and Motorway, the company is a well-established online vehicle purchasing platform...
Bringing to the market this denim and casual wear retailer, boating a user friendly comprehensive online presence.
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.