Timing M&A, Part II: Maximizing Value

Timing is important in M&A.  Look at Bebo.  Sold at a drunken sailor valuation of 850m to AOL during a frothy market a few years ago while it was still growing sharply up and to the right.  Or Friendster.   Sold to MOL for 26m last December despite having multiple chances to sell for over 100m.

Getting timing “right” in M&A really means “maximizing value.”  Maximizing value comes from maximizing competition among buyers.  That is, a buyer will only pay the most when it is convinced a seller has other attractive options.  Usually, these other options are selling to other buyers.

So, the most important factor in getting timing right in M&A is going out to the market when there are the most possible credible buyers.

When is that?  Stay tuned...