Sell your IT business: Buying and selling in the field of technology are daily bread. Some news behind a negotiation process that can take months with many issues that do not come to light. But which are vitally important for the operation to be a success. A long road in which, as managers of an IT business, many questions may arise.
IT acquisitions are many and of many types. Among the latest in the industry are GFI’s acquisition of IECISA or Apollo Global Management’s investment in Tech Data.
Some of them may be more than evident when looking at the trajectories of those bought and others come more surprisingly. But in all of them, there are many conversations and evaluations behind.
We have to lay ourselves in the shoes of those who receive a purchase offer to see what points they should look at when evaluating a proposal.
The Buyer, the First Difference
It is not the same that a competitor is interested in us than an investment fund or a manufacturer that has little to do with our niche. Assessing who is our potential buyer is the first step when starting to think about this possibility.
Although the intentions can vary a lot from one interlocutor to another. As a general rule, behind the type of company that is interested in us, there will be a more or less general intention.
In the case of investment funds, their maximum aspiration is to make the purchased IT business profitable. If they are also foreign to technology, you will intend to see the results in the short or medium-term instead of evaluating the IT business as a whole, assess the scope it can have in a longer period.
Competitors, for their part, will be more focused on improving their position in the market. An opportunity to grow and integrate more knowledge, offer, and of course, customers.
If the offer comes from a technology company -or not- that does not belong to the niche in which we are, we can see it as an approach to enter a segment that they consider incipient. In this case, they will seek our knowledge, human resources, and potential to squeeze that business into the future.
As important as the who is the how. Negotiations around purchasing terms are the hardest and most crucial part of the process. It is not the same as they want to acquire us to be part of the group but to maintain our business independence than directly integrating into another company, changing all the company’s processes.
Valuing the benefits and damages of all conditions very well is vital to not regret after time. In this sense, it is essential to know the conditions in which our employees will stay or how it will affect their work well-being. It may depend on this that the company continues to be as effective and productive or improves or, in the worst case, worsens because it is more unmotivated.
Is it the Right Time?
Another great question when it comes to saying yes to an acquisition process. Selecting the ideal moment to sell at the best price is not easy. In technology, what is worth millions today maybe half tomorrow. Because it is no longer exciting or the wave of innovation has passed. It is there where we must find the balance.
However, certain aspects can help us make a decision. To estimate the right moment we can look at both internal and external factors.
Internally see the level of operations we are closing, the reaction of potential and current customers to our IT business or even our own accounts.
Externally, observing market forecasts, the evolution of competitors or current demands will make us see what stage of the wave we are at.
With this analysis, we can predict if it is a good or bad occasion. A parameter with which we can play. But with measure since if we go over, it may be too late to close the deal or find a new buyer.
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