1. Plan your exitFail to plan, plan to fail is an old business wisdom that applies just as well to selling your company. Given that media companies are so sought after currently, planning for exit from the minute you have decided to sell can help ensure that your business commands the premium multiples that are achievable today.
2. Appoint appropriate advisersMany legal and corporate advisers say they specialise in the media sector, but it covers such a broad range of companies, from digital businesses to print media and advertising agencies, it is vital to choose advisers who possess the specialist expertise in your particular field to ensure you get the best price.
3. Articulate your digital strategyIt’s all about conveying your plans to capitalise on online/digital revenues. Legacy issues such as delays in switching print titles to digital platforms must be addressed. Also buyers are looking for evidence of growing digital revenues make sure they are highlighted in the Information Memorandum (IM).
4. Protect your IPIP is key for media companies. Registering trademarks for proprietary technology or magazine titles core to the business and keeping them updated is vital. This is straightforward but can often be overlooked and uncovered during buyer due diligence. Neglect here can have a serious negative impact on sale price.
5. Make management feel securePeople are probably a media company’s most valuable asset. Your top creative talent and high-profile editors are central to the value you can achieve for your business. Make sure they are properly informed and incentivised to buy in to the sale.
6. Highlight strategic relationshipsMedia companies will often have important relationships with leading international brands, such as advertisers, licensors, and clients. Highlight them clearly in the IM as they bring authority and cachet to your company and can help increase the sale price.
7. Identify the ideal buyerWhat type of buyer are you looking for: trade or financial. In general, a financial buyer looks for growth opportunities, and a trade buyer looks for a strategic fit with its products and services. Understanding precisely how your business fits the buyer’s requirements will help you present your company from the best perspective to excite interest and achieve optimum value.
8. Meet or exceed forecastsBuyers focus closely on forecasts in the IM. Hitting them might be easier for a subscription-based media business, whereas with a digital marketing agency, losing or gaining one large client can hugely affect the figures. In either case, missing targets undermines buyer confidence and potentially the price.
9. Timing is keyTiming is important. Currently media companies are hot last month we sold The Profile Group, owner of Fashion Monitor, Entertainment News and other well-known brands for over 8x EBITDA, a high multiple due to strong buyer demand for digital information businesses.
10. Present wellWith the creative talent they have in-house media firms typically produce excellent presentations for clients. Ensure that you harness this ability when you are producing the IM, and other material for the sale. Presentation can play an important role in attracting interest and securing a top price. Linda Sullivan is director of the Cavendish Media Group at Cavendish Corporate Finance.
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