Timing M&A, Part VI: Putting it all Together

Identifying the ‘right’ time to sell a company is never a simple ‘black and white’ process.  Many of the external and internal business factors to be considered are loaded with ambiguity.  There is also a critical personal element—what do you want to do?—that is often independent of business factors and also difficult to measure precisely.  
 
If you ask someone who makes a living primarily through transaction fees (such as Horizon Partners and all of our competitors), there is a temptation to say it’s always a good time to sell (see the National Association of Realtors circa 2006).  This conflict of interest has at times been a black eye for the industry, particularly when rogue bankers step away from sound judgment and begin giving self-serving, transaction-pushing advice.
 
We think the market for giving advice is efficient enough that taking a long-term perspective will be rewarded.  So that’s what we try to do.  While there are times when the best advice for a company is, in fact, an emphatic “sell now!” (if you are in the reality TV show business, this might apply to you), those times are rare.   This is particularly true in today’s deal market, where we find occasional good exits yet plenty of otherwise attractive sellers without motivated buyers.
 
Our view is that if a business has growth, profitability, and strong competitive advantages, it has earned the luxury of patiently biding its time until multiple eager buyers await in the M&A market.  If a company closes a transaction after engaging the most strategically logical and financially capable buyers in a competitive process, indeed, it got the timing right.