Deal or No Deal?
8. “Having the No. 1 titles in fast-growing, complex industry sectors will always help to attract buyers.
9. Having titles that have shown consistent year-over-year revenue growth at rates in excess of publishing industry averages will be impressive to buyers.
10. Having a compelling Internet strategy that is revenue-enhancing will be essential.
11. Having titles that fit hand in glove with a buyer’s existing portfolio will convince buyers of the strategic sense of the deal.
12. But before publishers take the step toward offering their property for sale, there is a lot of thinking to be done to ensure that the business is in the best possible shape. Time spent in advance of sale usually equates to greater returns at the closing.”
—Richard Mead, managing director, JEGI
13. “Get the company ready long before it goes into a selling process.
14. If the company is big enough, get an audit done. Clean up financial statements.
15. Take a hard look at the business as a new, potential buyer would.
16. Get an advisor long before the time you are ready to sell to give you strategic advice.
17. The best time to sell is when you have had a good year, and next year also looks good.
18. Spend time on a realistic valuation. Shoot for the highest price, but have a sense of what other companies have been purchased for.
19. Be able to articulate to a larger entity all the positive aspects your company brings to them besides cash flow—market penetration, high-quality staff, deep customer relationships, etc.”
—Tom O’Connor, managing director, Berkery, Noyes & Co.
Tips for Buyers
20. “An important focus for a buyer should be to confirm the historical financial performance of the business, as this will provide the platform for the business. But the real key to valuation is the projected growth of the business and understanding where growth will come from, what it will cost to generate and whether management is capable of delivering it.
21. There are other ‘domestic issues’ that are important as well, including the ability to create new revenue streams. … Overall, however, growth from the core business is the driving factor in encouraging a buyer to step up and pay for the business.”