Studies indicate that more than 80% of business owners who approach M&A advisors about selling their companies are turned away as not being “market-ready.” Other studies indicate that approximately 40% of middle market companies that are actually taken to market fail to transact, the primary reason being a large gap in the expectations of value between seller and buyer. In the remaining 60% of companies that do “successfully” transact, more than half of them must provide seller concessions in order to close the deal. As a result, M&A advisors are constantly competing for the relatively few companies that can be successfully marketed today, leaving many advisors hungry for new deals.
Have you ever thought about what happens to the 90% of companies that are turned away from even starting the exit process, and the 40% of companies who go to market and can’t transact? Such companies represent an enormous opportunity for cultivating future deals by working with them over a several year period to get them market-ready.
The VOP principles of identifying and mitigating company specific risk and roadmapping recommended improvement initiatives to increase enterprise value are the theories behind the Alliance of Merger & Acquisition Advisors (AM&AA) CM&AA certification course “Maximizing Business Value & Transaction Readiness”. Value Growth has become a major initiative to improve success in the M&A community.
The Value Opportunity Profile (VOP)® provides a standardized and scalable means of working with such companies to build your future pipeline of successful transactions. If you have the in-house skillset, you can work with those companies directly. If not, why not work in collaboration with a VOP® licensee who will cultivate those deals and return them to you when they are ready to be marketed at maximum value. You’ll experience a higher rate of transaction success, and at higher values.
Scott A. Yoder, Partner, CEPA, CM&AA, CPA (inactive), Strategic Equity Advisors, LLP
(A Division of Smolin Lupin, A BDO Alliance Firm)
“In my 22+ year career as a CFO and Advisor, I have not found any tool that comes close to the VOP® in helping ownership and management fully assess an enterprise and, more importantly, prioritize the value enhancement opportunities based on relevance and value impact.”