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There are many options to consider
as the ultimate goal for the year of hard work building and growing your
company. For mature and profitable healthcare businesses today there are
many strategic options to consider. These options include acquisitions,
merger, divestiture and recapitalization. Each of these options require
careful consideration to determine what is the best fit for the stakeholders
goals for the business.
Should you consider a buyer or an
investor? If your goal is to sell and ride off into the sunset, then your
focus should be on a divestiture. If your interest is in taking chips off
the table while continuing to grow the business over the next three to five
years, then a recapitalization may be the best path for you. Each option
has differing effects on valuation, the process and the pathway to a successful
Exit strategy planning is one of the most overlooked - and most
important aspects - of a business owner's dream. You would not read all
but the last chapter of a book... nor should you ignore the final chapter in
your business ownership.
Sell / Divestiture
You have worked for years to build your business.... your "baby",
which would provide something tangible for those retirement years.
Now, after carefully assessing the results of past achievements and
plans for the future and the appetite of the marketplace, you decide
to pursue a sale. So, is now not only a good time but the
right time to sell your business?
The answer to this question will take some careful analysis and
perspective of the current market environment specific to your
business (and some soul searching). It is key to understand
the many factors which not only impact the valuation of the business
but also the net result to you and your stakeholders at the closing
table. A few key thoughts to consider:
Business Performance - The
single largest factor that will determine the valuation of your
business is its performance. Not just historically but current
results (we use a rolling, trailing twelve month snapshot as part of
our analysis). Are your revenues and the level of
profitability sustainable? What are the prospects on the
horizon? The best time to sell your business (with the
other factors considered) is when it is doing well, growing and has
not met full capacity (peaking). Buyers like to invest and
value business higher when they can see that the business will peak
while on their watch.
Buyers and Investors "The Market"
- Although it only takes one buyer to make the sale, multiple buyers
with a strong appetite for your specific business drives valuation
and the ability to consummate the transaction in a timely manner.
The market flows in cycles (some of which are not always
predictable) and it is imperative to seek counsel from professionals
(such as Paragon Ventures) on the current market perspectives,
valuation, transaction structures and other details... again, for
your specific business.
Although there are many "rules of thumb"
that are quoted, the determination of when is a good (right) time to
sell your business is very specific to your own criteria and the
factors which impact the ultimate transaction for your business.
Click on the slide below for a
presentation on "When is the RIGHT time to sell?"
For more information please contact Paragon Ventures
“Take significant chips off the table.”
“Rapidly grow and propel the business to the next level.”
“Keep the team intact and the dream alive.”
“Take a second bite of the apple”
Private equity represents another
interesting option for business owners looking for growth capital, strategic
sponsor and/or as part of a tiered exit strategy. Many people don't
realize the role that private equity plays in the world. The fact is that
private equity investments (both current and past) are behind some of the worlds
most well-known and successful companies.
Private equity investments total
hundreds of billions of dollars each year and a significant and growing
percentage is targeted for healthcare organizations. You may not know the
private equity firms behind them; however, you are familiar with the brands they
have built. Each of these successful companies (and thousands more like them)
have been funded or recapitalized with private equity since their original
Paragon Ventures maintains contact
with over 3,500 private equity firms which have been prequalified with committed
capital and healthcare related business. These firm are not just financial
investors, they are strategic private equity focused on our industry and the
opportunities healthcare companies represent.
The graphic below highlights a
simplified outline of how a private equity transaction works for a privately
Our client reference list is
available upon request, call 800-719-1555 or complete our on-line inquiry
Paragon Ventures • 104 South Wayne Ave # 415 • Wayne • PA
• 19087 PH: 800-719-1555 FX: 610-500-5100
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schedule a private conference
Paragon Ventures is a full service
professional advisory specializing in all aspects
of the confidential sale, merger and valuation of growing, profitable,
mid-market healthcare companies
Sell A Business
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Paragon Ventures M&A InSight Newsletter
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happenings in the world of mergers and acquisitions.
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If you are considering selling your business within the next year or so, the
time to start is now. Strategic planning far in advance of the actual
event can significantly add to the eventual sales price.