Exiting gracefully:

When and how to sell your company

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Session recap

Exiting gracefully: great companies are bought, not sold

“Great companies are bought, not sold,” according to Jonathan Kaplan, Founder & CEO, The Melt. In Tuesday’s “Exiting gracefully” Forum session, moderated by Paul Hammes, Ernst & Young’s Americas Leader – Divestiture Advisory Services, he contended, “The best time to sell is when someone wants to buy.”

And how does a company attract a buyer? All of the panelists agreed: Think like one.

Focusing on the buyer’s perspective — asking the questions a prospective buyer would ask — helps companies understand the elements that make an attractive prospect and those that can be improved.

“What are buyers looking at when they come through the door?” asked Greg Psihas, Corporate Vice President, Mergers & Acquisitions, Applied Materials, Inc. He recommended some soul searching: “What is your growth relative to others in the space? What is your margin profile relative to others? What is the mix of players in your space? All of those things go to quality of assets. What we look for in a company is good differentiation and good management teams — something that can protect our investment.”

Growing forward
Companies should also be cognizant of factors they can’t control. Michael Cote, Vice President of Dell SecureWorks, noted, “When you get ready to sell, you have to look at the macro environment. Can you continue to grow? And inwardly, do you have a management team that can take you to the next level?”

Jim Prevost, Vice President – Acquisitions & Divestitures, The Procter & Gamble Company, said, “We want to understand the strategies and historical performance of business. So we want to know: What drove your growth? Be able to explain it in a crisp and credible way.”

Prevost’s final advice was, “Don’t play hide the ball. We’ll probably find it — even if it’s not something that affects us, it brings your credibility into question. Be up-front.” Just remember, he added, “You don’t have to do everything well — you need to do the one or two things that make your company great.”

Speakers:

Greg Psihas photo

Greg Psihas
Corporate Vice President, Mergers & Acquisitions
Applied Materials, Inc.

Michael Cote photo

Michael Cote
Vice President
Dell SecureWorks

Jonathan Kaplan photo

Jonathan Kaplan
Founder & CEO
The Melt

Jim Prevost photo

Jim Prevost
Vice President - Acquisitions & Divestitures
The Procter & Gamble Company

 Moderator:

Paul Hammes photo

Paul Hammes
Americas Leader - Divestiture Advisory Services
Ernst & Young LLP