Receiving a palatable asset valuation is far from a certainty, especially during times of economic difficulty. Preparation is crucial to increase the likelihood of a favourable price. When appropriately implemented, sell-side due diligence reveals previously unforeseen risks, giving the seller time to resolve problems before they can impact the valuation, but it also highlights and quantifies areas of strength.
For those looking to sell quickly, conducting robust due diligence improves the likelihood of a smoother transaction process—it contextualises asset challenges, allows the seller to control the exit narrative and identifies opportunities for the buyer to grow and differentiate the assets from other market players.
Contextualise Asset Challenges
Contextualising the challenges assets face is essential, especially in the current economic and geopolitical environment. Therefore, before the asset is put up for sale, sellers need to fully understand the broader economic, regulatory and competitive landscape to inform decision-making and anticipate future challenges. The ability to also overlay this against how others in the sector have performed under the same conditions can be a strong differentiator.
From the buyer’s perspective, contextualising challenges increases transparency and builds trust with potential buyers. By highlighting issues that may arise, sellers can demonstrate that they are being honest about all aspects of the asset, increasing the chances of a successful transaction.
Control the Exit Narrative
Controlling the exit narrative is vital because it significantly impacts the asset’s perceived value and desirability. It can shape the buyer’s understanding of the company’s history, culture and future prospects. A well-crafted exit narrative can help position the asset in a favourable light, highlighting its strengths, providing reassurance regarding any perceived weaknesses, and communicating its vision and goals in a way that resonates with possible buyers. One of the most important elements of a ‘good’ exit is a carefully crafted, evidence-backed view of why an asset is an excellent investment opportunity.
But controlling the exit narrative goes beyond creating excitement for the buyer. It also helps to maintain confidentiality and protect the company’s reputation during the sale process. By carefully controlling the flow of information, companies can reduce the risk of details being misconstrued, ensuring the sale process is handled professionally and discreetly.
Identify Opportunities For Growth and Differentiation
In the current economic climate, assets with multiple, diversified growth opportunities will be in high demand. Technology is the most powerful and scalable vehicle for creating value today, and assets that are receiving particularly high interest from buyers are those that have undergone (or have the potential to undergo) extensive digital transformation. Organisations have the power to differentiate themselves from other industry players with digital by automating processes to reduce business costs and produce more relevant digital products and services to improve customer and employee experience.
The Onefourzero Sell-Side Toolkit
A growing number of firms are commissioning sell-side diligence to hold or improve their valuations. Proving an asset’s worth to potential buyers is essential in the current economic and geopolitical climate, as buyers are more cautious now than in previous years.
We are an award-winning, sector-agnostic consulting firm delivering commercial, digital and technology advisory services across the M&A lifecycle. We offer three distinct services: diligence reports, a one-stop data monitoring tool and value creation services.
Diligence: We deliver data-driven M&A reports for investors and brands to help make informed decisions that affect commercial growth, marketing investment, operational effectiveness, digital strategy and international expansion. On the sell side, this ensures that the highlights for a potential investor are clearly outlined.
Live data monitoring: Threesixty is our one-stop monitoring tool which provides portfolio companies and investors with an aggregate view of any sector, brand, product or service on demand and alongside key competitors. Companies that have implemented monitoring during the hold period are able to demonstrate enhancements in competitive positioning or internal efficiency for a potential buyer.
Value creation: Our experienced team of commercial analysts and strategy consultants translate large data sets into actionable value creation roadmaps, assisting portfolio companies with delivery and execution, even during the run-up to a sale, for enhanced valuation and smooth exits.
Sell-Side Diligence: Get Sale-Ready with Onefourzero
Receiving an optimal valuation requires preparation, and we can help increase the likelihood of a favourable price. Contact us today so we can help you contextualise challenges, highlight growth and differentiation opportunities and control the exit narrative throughout the process.
