Seal Your Legacy at the Right Time for Maximum Value

Realizing business value is complex. There is a continuum of options for realizing business value. Selling 100% of the business is one of many options. The best choice, including when to execute each choice, depends on a combination of factors, which are unique to each case.

The Challenge

You have worked hard over many years building a great business. You are feeling ready to move on to new challenges, or maybe you just want to take some money off the table now and sell later. As you consider realizing the value you have built, you may have asked yourself these questions:

  • I’ve been approached by third parties about acquiring my company — how serious are they?
  • How do I realize a premium value of my business? Should I sell the whole company now, or take capital out over time? Am I prepared to operate with an equity partner for a few years?
  • When is the right time to sell? Are there things I should be doing now to dramatically increase the proceeds if I decide to sell later?
  • How do I manage the trade-offs between maximizing value and protecting the company and its employees?
  • What if my company’s employees, customers, and competitors find out I'm selling the company? What if the process fails after they find out?

Estimates of success rates on sale transactions vary — some are as low as 25%. While the success rates increase dramatically for larger companies, even the largest companies face a significant risk of mission failure.

Why Failure is Common

The most common reasons sale transactions fail are:

  • Deciding to sell before the company is sale-ready.
  • Unrealistic value expectations.
  • Not having a structured process and reacting to unsolicited approaches instead.
  • Lack of pre-launch due diligence and preparation.
  • Poor launch timing.
  • Failing to identify and engage with those potential buyers that can pay the most.
  • Failing to present a clear, compelling story to potential buyers.
  • Professional advisors who do not understand the market practice and market deal parameters.

The irony: skipping the preparation work and declining to run a process to keep it "simple and quick" results in the opposite. All too often, this approach results in endless discussions that go nowhere and drag on for years, often resulting in damaging information leaks and awkward conversations with stakeholders.

Client Success Story

Clarion is a leading Canadian provider of medical and aesthetic equipment and consumables to hospitals, aesthetic clinics and private medical practices. Valitas collaborated with Richards Packaging Income Fund and its advisors to negotiate a pre-emptive valuation with a deal structure that would recognize the value of the future upside in Clarion. This transaction closed in June 2020, during the global pandemic.

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Our Capabilities

Before we launch a sale process our clients are informed of:

  • The valuation range they can expect if we commence the sale process at that time.
  • The future value they might expect if they delay the process.
  • The other options for attaining liquidity for their shareholders.

To us, a successful transaction represents the capstone of a constructive relationship and the quantifiable realization of our clients' business success. Over our careers, our team has completed over 65 sale transactions worth more than $120 billion in aggregate, including some of the largest M&A transactions in Canadian history. We counteract the “Canada Discount” by accessing global buyers — typically 90% of the buyers we approach are outside of Canada. Most of our completed transactions have involved foreign buyers.