Providing Professional Consulting Services to the Security Industry

Exit Strategies

Being aware of the various types of buyers and knowing what is most important to them will help you maximize your selling price. Planning your exit 2 to 5 years in advance will allow you to make strategic decisions today that will maximize your return at the time of sale.

In addition to profitability, the following are the characteristics of your business that are critical to a buyer:

  • Critical Mass
  • Bill and Pay Rates
  • Client Profile
  • Contract Tenure
  • Contract Terms
  • Client Concentration
  • Accounts Receivable / Payment History
  • Client Retention
  • Employee Retention

The following are two of the various types of buyers that you may encounter while attempting to market your company. Each has their own unique motivation which will have an effect on the amount and the terms of a proposed offer:

Strategic / Industry Buyers

Existing security companies interested in purchasing contracts for the purpose of entering a new market or increasing cash flow and market share in an existing market. Generally, these buyers will employ most of your security force but not management nor administrative personnel. They will also focus on compatibility issues which will impact their integration efforts.

Equity Investors

Venture capital groups, often backing one or more individuals with industry experience. Buyers such as these are often looking for value beyond the contracts themselves such as administrative infrastructure, field management, sales or marketing talent, operating assets, or market relationships. This is especially true if they are making their first or “platform” acquisition. They are also more likely to have interest in maintaining a post-transaction relationship with the seller.

As always, advance preparation is the key to success! We can assist you with this process in two ways:

If you are planning for a future sale, we will analyze all aspects of your company and work with you to develop an action plan which will result in changes necessary to maximize the enterprise value.

If your interest is to sell now, we will evaluate your company and recommend a target value. We will then prepare a formal offering
memorandum, contact the appropriate potential buyers and represent you through to the close of the transaction.