Selling a PR Agency and What to Know About the Process
Palazzo Investment Bankers, Gould+Partners Group or Art Stevens Can Help.
If you are considering selling your PR Agency, first know that it probably is going to take some time. Plan on nine months from start to finish. Also, you should know that whatever deal you work out will probably vary widely from similar sales. Each deal will be unique.
The good news is that Mergers and Acquisitions specialists and private funding services are becoming more optimistic about future possibilities. There are many good consultants in the arena who can help. From Phil Palazzo of Palazzo Investment Bankers to Rick Gould of Gould+Partners Group, to the legendary Art Stevens of The Stevens Group, there are a number of smart consultants in the arena who can assist if you want to sell your PR firm.
Some of the common steps in these transactions include:
1. Those companies that are buying are demanding more. Expect them to want deferred consideration or partnerships and longer earn-out periods. It will be more difficult to get a straight sale. Many of the deals will not be for cash, but the new owner will combine the acquired company into their own and buy with partial ownership in the combined entity.
2. Start now, if you haven’t already, building a broader and effective digital marketing practice. Buyers are actively seeking companies that have built a great digital reputation for themselves and their clients.
3. Spend time and effort to build your brand and make sure your staff is an active part of the process. When you do so, your firm is not as reliant on one or two key individuals, which means more stability with or without selling your agency. That translates to a positive for buyers looking to acquire.
4. Remember why you want to sell and what your make-or-break factors are. You’ve spent your time, sweat, and a good portion of your heart and soul building your agency. You did it with a certain belief system attached to the process. Make certain the deal will not leave a sour taste in your mouth afterwards by digging deep to discover the buyer’s business goals and how they handle clients.
Where to begin?
First, you will want to contact someone who can check with possibly interested buyers – but on an anonymous basis to begin. Once matches are found, you’ll meet with them to discover if your business chemistry will mesh. After due diligence is completed, the buyer will make an offer if they are so inclined. Then negotiations begin, and when a deal is agreed upon, a full due diligence with ensue. During this time there will be an exclusivity agreement, generally lasting about three months.
Once a sale is finalized, and all the legalities handled, it will be time to notify employees, clients, and other interested parties. The entire process usually takes between six and nine months.
There are many who have done well in selling their agencies – and many who wish they didn’t.