Mergers and acquisitions for system integrators: Building, preparing and realizing value

By Clint Bundy posted 06-21-2018 10:23


This is the third in a three part series on Mergers and Acquisitions topics addressing the Control System Integrators Market.
Read part 1  |  Read part 2

When an owner is ready to begin the sales process of a system integration firm, there are a number of pieces that need to successfully come together. In order for a company sale to occur, it is important for the owner and advisors to jointly manage the sale process. By doing so, the outcome is more likely to be orderly, smooth and lucrative for the business owner.

Buyer types
The advisor and the seller of a company need to determine what objectives, goals and potential buyer profiles look like early in the process. Finding a best fit for the seller is a vitally important step. Buyer options can include strategic buyers, private equity-backed strategic firms, private equity firms and entrepreneurial buyers. Each buyer group brings unique offerings with advantages and disadvantages attached to each group. It is important for the owner to have a strong understanding of not only the buyer groups, but the experience they bring to a controls and integration sector purchase.

Process and timeline
From the start of a marketing process to the closing date, the sale of a business can take six to twelve months, or longer, depending on the circumstances. The steps in a sale typically include the drafting of confidential marketing materials and data room contents, finalizing confidentiality agreements with buyers, scheduling and completing buyer-seller meetings, receiving Indications of Interest and Letters of Intent, working through due diligence, and closing the transaction close. The details of each phase are important, and it is vital that a seller and his investment banking, legal and accounting advisors remain organized and not lose momentum. Not only is it important to complete these steps, but a seller should strive to maintain multiple options and a competitive atmosphere in order to achieve the desired outcome.

Clint Bundy is a Managing Director with Bundy Group, a boutique investment bank specializing in business sales, capital raises and acquisitions for the system integrator market.