Thinking of using a sector specialist advisor? Think again
Liz Jackson MBE writes: I speak to business owners every day – at all stages of the business lifecycle, in lots of different sectors, and all with different dreams of where they want to go next. But when it comes to selling a business, there is one thing they have in common: a lot of questions.
One of those questions – and it is a very good one – is this: “Why would I use you to help me sell my business, when there is a well-known sector specialist advisor, who only works in my industry?”
Of course, employing a specialist is usually a very good idea. You probably wouldn’t want a mechanic drawing up architectural plans for your loft extension, or your dentist having a go at open-heart surgery.
“When it comes to selling a business, the key specialism is the ability to do just that: sell a business”
You want an advisor with the proven ability to deliver complex transactions, with great outcomes, with experience of a vast range of deal types, to a wide range of buyers and investors. You want someone independent, impartial, who will always fight for your best interests.
You definitely don’t want an advisor who might work on ‘both sides’ of the table, with close buyer relationships to protect, or any dependence on the community of buyers/investors for their next client. And, as our hundreds of completed transactions clearly demonstrate, you always want to look beyond the usual suspects – the obvious buyers.
I’m not into competitor bashing. A good advisor will add significant value to a transaction. But when a business owner asks me why he or she should choose us over that sector specialist, I point out what they’ll get from us…
Outside-the-box research
Our innovative, fresh approach to research ensures our global view of potential acquirers is broad and holistic. This means we consider buyers entering the sector, as well as all the obvious players, for strategic fit. We look at complementary areas of activity. We look at home, and abroad. This is evidenced by our track record of over 50% of our clients being sold to overseas acquirers, with the majority of investors having a head office either in Europe or North America.
Our clients often comment on our ability to think laterally. And, more importantly, bring buyers to the table they would never have considered. As David Twiddle of Renovo told us: “No-one but you would have thought of putting us together with the company that bought us.”
Impartial, independent outlook
We never work for buyers. We’re sell-side only, focused entirely on getting maximum value and the best fit for our clients. This is best evidenced by the truly competitive bidding environments we create, and our independence is a clear factor in bringing multiple buyers to the table. It’s not unusual for us to have five or more initial offers from different parties. In one recent transaction, first round bids alone were in double figures.
“It was clear from the outset that we had done the right thing in choosing you” – Sam Pemberton, Softel, sold to Belden Inc
Our clients past and present recognise this. As Sam Pemberton told us at the time of the sale of his specialist software captioning business to Belden: “We didn’t think that in an industry like ours, you would be able to identify a large number of potential purchasers. The research team certainly lived up to their reputation and your process did create a competitive environment around the business. It was clear from the outset that we had done the right thing in choosing you.”
In some niche sectors, we might have less of a track record than the specialist. But we have been dealmaking for over 35 years, and have the in-house experience that comes with working on a vast array of deal types. Some catch the eye because they are disruptive and differ from the norm in the corporate finance world. A stand-out would be the sale of exhibitions/events business Allworld, acquired by UBM plc for US$485m. The financial press certainly took notice of that. As Patrick Hosking wrote in The Times: “Allworld is all about growth [but] the price is pretty full at 12.9 times trailing EBITDA profits.” The shareholders of Allworld appointed us primarily because they were confident in our ability to do deals, felt the chemistry and approach was right for them, but also precisely because we came with a totally new perspective.
Past clients are our best advocates
Our Fellows community is unique, made up by 250+ of our former clients who choose to stay close to us post-transaction. Our clients have awarded us an NPS of 78 and cite our human approach to deal making as a major factor. We believe no other corporate finance company can boast this level of advocacy, whether they are a sector specialist or sector agnostic.
Clients of ours who have sold more than one business often remark how our approach differs to other advisors. As Scott Russell, who sold his Tech Track 100 business to Daisy Group told us: “I’d never dealt with a boutique advisor like you before, and I found you guys brilliant because you sat down with us and asked us questions that the other companies weren’t asking. There was a team there, and it sounds really clichéd, but it was like a family.”
“You did a superb job. I think that what makes Initium special is the people behind the business” – Scott Russell, sold NEG to Daisy Group
“It felt a lot better doing business with you than the big firm. With the big firm, I had felt like an irritant to them. You’d get a junior doing some of the stuff. They didn’t really research the marketplace. They were lazy. But you did a superb job. I think that what makes Initium special is the people behind the business.”
It’s also a huge advantage that we’re employee owned. It’s about alignment. These days we work with a select number of businesses. Initium is a team of 30 co-owners ─ and everyone you interact with here is entirely focused on achieving an outstanding result for you. It’s our business, and we care about who we work with.
I always say our day job is selling your business. That’s all we do, and that’s why we’re so good at it. And of course, I’d argue that’s the only kind of specialist you need.