© Copyright Acquisition International 2025 - All Rights Reserved.

Article Image - CEO’s Must Be Set Up for Success When Eyeing up M&A Exits
Posted 4th September 2024

CEO’s Must Be Set Up for Success When Eyeing up M&A Exits

Companies’ sale memorandums are often compendiums that fail to tell a compelling story, and while compiling key information has value, it does not sell a business for the maximum price, says Victor Basta, CEO and Founder of DAI Magister.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

CEO’s Must Be Set Up for Success When Eyeing up M&A Exits

By Victor Basta, CEO of investment bank DAI Magister

Companies’ sale memorandums are often compendiums that fail to tell a compelling story, and while compiling key information has value, it does not sell a business for the maximum price, says Victor Basta, CEO and Founder of DAI Magister.

Investment bank DAI Magister states throughout its Stage 2 exit process that before embarking on an intensive, competitive M&A sale process, businesses should have a thoughtful, sustained preparation over several months or even 1-2 years before being formally put up for sale increases both the price and certainty of an eventual deal. 

Elaborating on the critical steps for successful deals, Victor states, “Exit preparation should become a business process over a defined period. At its core, every company comprises a set of processes that operate efficiently to support growth. Exit preparation needs to become a process with a small group assigned for clear oversight and responsibility allocated, goals set, and outcomes evaluated.”

A core part of any CEO’s job is achieving a successful exit, and in the months or years before that exit, every CEO should invest this level of time towards a better outcome.

Victor continued: “The time discussed is often uninvested as CEOs are unsure where to invest it, with most successful growth CEOs delivering perhaps one, or at most a handful of successful exits in their careers. Adding someone to the CEO’s circle with this context, well before an exit, can help a CEO navigate the process with confidence.

“Strategic buyers have no interest in a growth company’s current numbers and care more about what they can do with the acquired company post-close,” Victor adds. “One of the biggest mistakes CEOs make in exit planning is to focus on refining forecasts in the way they have learnt when planning a funding round. It is more important that a company exceeds its near-term forecast by even a small margin. For instance, a company achieving $45m in revenue having forecast $50m likely receives a lower valuation than it would forecasting $42m then achieving $43m.”

CEOs regularly under-appreciate the importance of risk reduction to even the best buyers, and strategics think at least as much about risk as about upside and potential. High value exists when a buyer is confident a company is exciting and safe to buy. Exceeding a near-term forecast can mean a buyer grows confident enough to discount future performance less, which leads to a higher exit price.

In continuation, Victor states: “Sale memorandums must also tell a compelling story by anchoring things a company has done, which even much larger companies find challenging. This includes redeveloping a complete fintech stack, breaking into an important but challenging market, signing one or more game-changing commercial deals, onboarding a difficult but high-value customer, or maintaining high customer satisfaction.

“An equity story should demonstrate how a growth company can multiply in size and expand its offerings. Large buyers are more interested in how an acquisition can drive revenue/value post-deal, how it helps the buyer ‘fix’ a gap or problem in a business unit or enables them to compete and win large contracts or customers”, Victor elaborates. “Furthermore, a compelling equity story should anchor and highlight a company’s core DNA. It is critical to be clear and emphatic on which attributes drive a company’s success and use that to distinguish the best buyers from those merely curious.

“KPIs and unit economics are VCs’ should be used carefully, as calculations are complicated as large companies often calculate the same metrics differently. Also, growth companies track far more detailed KPIs than a potential buyer, and over-sharing can sometimes trigger questions a buyer might otherwise not ask.”

Victor adds: “Another key element of exit prep is investigating key competitors and defining positive differences. CEOs should clearly define the 2-3 most powerful differences that make their company outstanding and weave each into the equity story. Many growth CEOs are also deterred by the idea of being safe to buy, focusing on raising excitement levels around their businesses. Yet for large buyers, safety is equally valuable, sometimes more so.” Victor concludes, “It is clear first-hand how markedly better exits result from preparation before a sale effort. The reason half of sales processes fail a company is immediately an asset for sale, offering buyers a compressed time frame to make a strategic decision. Groups must be assigned for exit preparation to ensure the correct strategy is in place. CEOs must invest time into achieving a successful exit by conducting regular reviews with clear deliverables, ensuring management and the board see how exit prep has developed every two to four weeks. Lastly, sale memorandums must grip buyers and tell a compelling story defining how they stand out from the pack, communicating opportunities, exposing companies DNA and differentiating from competitors.”

Categories: News


You Might Also Like
Read Full PostRead - Eye Icon
2016’s Ones to Watch in Environmental Due Diligence
Corporate Social Responsibility
01/07/20162016’s Ones to Watch in Environmental Due Diligence

Arcadis is the leading global design and consultancy firm for natural and built assets.

Read Full PostRead - Eye Icon
eBay – Just the Ticket
Strategy
31/05/2016eBay – Just the Ticket

Online marketplace giant eBay has revealed it plans to buy the Spanish online ticketing platform Ticketbis, in a move that will see eBay expand its StubHub business to Europe, Latin America and the Asia-Pacific region.

Read Full PostRead - Eye Icon
Where It Counts
Finance
01/11/2019Where It Counts

Based in Broken Arrow, Oklahoma, it’s surprising that IRON Tax is one of the few firms that specialises in the new field of cannabis accounting. We caught up with CEO Roger McCloud to find out more.

Read Full PostRead - Eye Icon
How the US is Improving Worker Safety in Construction and Related Industries
News
17/06/2024How the US is Improving Worker Safety in Construction and Related Industries

How the US is Improving Worker Safety in Construction and Related Industries Construction and several related industries are among the most hazardous, accounting for nearly 20% of all workplace fatalities in the US, according to OSHA. Ensuring worker safety is

Read Full PostRead - Eye Icon
What Can You Purchase with Crypto?
News
24/07/2023What Can You Purchase with Crypto?

Almost a decade ago, it was impossible to do anything with cryptocurrencies other than trade and store tokens in a wallet and hope for the best. Much has changed since then, however, with crypto now being used to purchase a wide variety of assets, products and

Read Full PostRead - Eye Icon
Employees: This Is How Tax Fraud Affects your Background Check in 2021
Finance
04/06/2021Employees: This Is How Tax Fraud Affects your Background Check in 2021

Paying taxes and filing returns is an important civic responsibility. While some employers may fail to make a background check on tax fraud, you wouldn't want to be on the wrong side of the law. Tax fraud occurs when you knowingly forge information on tax retu

Read Full PostRead - Eye Icon
Berkshire Hills Completes Hampden Bancorp Acquisition
M&A
22/04/2015Berkshire Hills Completes Hampden Bancorp Acquisition

Berkshire Hills Bancorp, Inc. has completed the acquisition of Hampden Bancorp, Inc., and the merger of Hampden Bank into Berkshire Bank.

Read Full PostRead - Eye Icon
Lawrence Grant Chartered Accountants
Finance
03/06/2016Lawrence Grant Chartered Accountants

Lawrence Grant Chartered Accountants has been providing accountancy services and tax advice to 100’s of individuals, sole traders, corporate businesses and multi-national clients across Middlesex and the Greater London area since 1969.

Read Full PostRead - Eye Icon
Uncloak Technology for Cutting-Edge Brand Protection
News
18/03/2024Uncloak Technology for Cutting-Edge Brand Protection

Uncloak Technology for Cutting-Edge Brand Protection In the ever-evolving terrain of the digital age, the realm of brand protection has witnessed a paradigm shift with the advent of Uncloak technology. This groundbreaking innovation has revolutionized the way



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow