Why the major corporates could be sizing up your business
Think your company is too small to be acquired by the big boys? Think again.
BCMS client Mark Rockett, of Rockett Interactive, started his business from his spare room in 2003, with a $1600 loan for a laptop, and a very clever idea. His boutique digital marketing business was acquired early in 2015 by Dentsu Aegis Network, the multi-national advertising and media giant, with declared revenues in excess of $1bn.
“We went to meet their senior people in New York,” Mark told the BCMS team. “We couldn’t believe it. I mean, they have 23,000 employees, and we have 16!”
Rockett Interactive is a dynamic, growing business, in an exciting sector, with proven, specialist expertise. But Mark’s experience is by no means unique. According to BCMS analysis, larger corporates are targeting significantly smaller SME organisations. Why is that? In BCMS-led deals in the tech-sector, for example, 30% of acquirers posted revenues of £100m+ - with a third of those declaring turnover in excess of £500m. On average, across a range of tech sector deals, acquisition of our clients added less than 1% to the revenues of the acquirer.
What does that tell us? That the motive for buying isn’t just about making more money. It’s about strategy – buying in news skills, niche expertise, and investing in potential. The larger corporates have money to spend, and clear strategies on where and how they will spend it.
It’s not just tech. BCMS clients in the food, manufacturing, engineering, and energy sector have sold to listed organisations, with market capitalisation measured in the billions. And 30% of our clients sell to an overseas acquirer, demonstrating the value in your advisor looking far and wide when it comes to researching and approaching acquirers.
If, like Mark Rockett, you started your business from scratch, you shouldn’t be afraid of thinking big when it comes to seeking a sale.