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.
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:
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.
The most common reasons sale transactions fail are:
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.
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.
Before we launch a sale process our clients are informed of:
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.