Valuing and Selling Your Firm

Strategic Acquisitions

Strategic acquisitions have evolved beyond simply adding capacity or revenue to a firm. David Baker explains that these purchases are now often driven by the desire to acquire specific expertise or positioning that complements the acquiring firm's existing capabilities 1. This shift highlights the importance of being a well-positioned firm, as it significantly increases the value of a sale. Blair Enns notes that trends in acquisitions have become more favorable for sellers, with shorter earnouts and more cash at closing 2.

   

Acquisition Dynamics

The dynamics of acquisitions are shifting, with buyers seeking to achieve larger-scale goals they can't reach organically. David Baker observes that this has led to increased interest from non-traditional buyers like large consulting firms and even clients themselves 3. These buyers are often looking to access new client bases or intellectual property rather than just financial gains. Blair Enns adds that the evolving trends in acquisition practices, such as fairer non-competes and more reasonable performance targets, reflect a more mature understanding of the principal's role in revenue generation 4.