A strategic acquisition is a different animal. The strategic acquirer will place a value based on how much more of their product they can sell, which is exactly what Business Objects did when they bought Next Action Technologies, for 8X revenue.
Most financial acquirers will arrive at an offer for your business by calculating the profit they expect you to make and deciding what they are willing to pay today, for your profit stream in the future. Because you are competing with lots of other places that the acquirer could invest their money, multiples are usually in the low to mid-single digits of your pre-tax profit.
A strategic acquisition is an entirely different animal.
A strategic acquirer will value your company based on how much more of their product they can sell. Knowing who the strategic acquirers are in your space and positioning yourself accordingly is what we handle during The Short List Builder, module 11 in The Value Builder Engagement. Get started for free by getting your Value Builder Score.
Kellet is the co-founder of the social-list content platform Listly, which combines crowdsourcing, content curation and embeddable lists to drive high-level community engagement, live inside your blog posts. Kellet sold his visual segmentation startup, a tool that exploited our love of Venn diagrams to discover and express the business questions people needed to ask, to Business Objects (now SAP) in 1999. Instead of the predictable book Kellet, a passionate innovator, self-published a board game. His game, GiftTRAP, based on the act of gift exchange, is translated into 12 languages and won more than 20 awards globally, including a Spiel des Jahres prize (the gamer’s Oscar).