Contractor Exit Strategy 3 of 6: Strategic Sale to an Outside Buyer

Every contractor wants a strategic sale to an outside buyer.

D. Brown Management Profile Picture
Share

Specifically, an outside buyer that sees such a strong strategic fit with their business that they are excited to pay a 6X earnings multiple of the best performing year the contractor has had during the last three years in cash. 

Succession: Exit Strategy 3 of 6 - Strategic Sale to Outside Buyer.

Fact: Most media coverage of deals is either a strategic sale or a catastrophic liquidation through bankruptcy. This can skew a contractor’s view of the market.  

Fact: Only a small percentage of ownership transitions could be considered strategic sales with high valuation multiples.

Fact: The only way a high valuation makes sense for the buyer is if the contractor has either a competitive position, technology, or process that can be scaled up significantly with access to more capital or other operational assets the buyer has. The ROI (Return-on-Investment) still must pencil out for the buyer.  

Fact: Few contractors have truly built highly scalable competitive advantages that make this type of exit an option.  

Fact: If you have truly built scalable competitive advantages that require more capital to execute then an outside strategic buyer is your only option.  


Contractor Exit Strategy 3 of 6: Strategic Sale to an Outside Buyer
Continue building value in your business, yourself and your key team members with a good succession strategy....

Contractor Exit Strategy 3 of 6: Strategic Sale to an Outside Buyer
Continue building value in your business, yourself and your key team members with a good succession strategy....

005 - Prioritization Basics for Construction Contractors
Resources are limited, but demands are endless. Success in construction means prioritizing resources. We cover prioritization basics, with exercises to align your team. Includes 3+ hours of examples and 40+ tools, books, and resources to keep you growing.
Appearance and Experience of Management Control
As your career develops and you grow into roles of greater responsibility, one of the biggest challenges is what Jennifer Garvey Berger calls “The paradox of the appearance of increasing control and the experience of decreasing control.”
Cash Flow Tip 16 - 5/10/15 Collection Process
Use the 5/10/15 Collection Process to ensure faster payments. Don’t let the marginal gains achieved so far with Cash Flow Tips 1-15 get squandered by poor collection practices.