Are you leaving money on the table?
Let’s just say that you have made the decision that you want to get your money out of your company. Now comes the hard part: What’s the best way to maximize your end game profit?
Talk to a third party which deals with M&A. Make sure if you are a small to medium sized company that you go to a company that makes a good fit. I’m connected with several excellent M&A firms, but they only deal with companies who trade in the hundreds of millions. Not a good fit for a mid-sized firm.
I know of a smaller firm which went to an M&A company that had never sold or merged a mortgage banking company . Because of the investment banker’s lack of experience, that smaller lender left a good amount of money on the table.
The market and the formula have changed. Today, the recipe is value of servicing + cash+pipeline + value of the agency licenses. Gone are the days where an extra strong enterprise value payment was made.
You’ve come this far with your business. You’ve put hard work and effort into making it to the finish line. Be sure to think it through and finish strong.