Learn | Aiming for an Exit? 3 Strategies to Protect and Generate Value

 Learn | Aiming for an Exit? 3 Strategies to Protect and Generate Value

Aiming for an Exit? 3 Strategies to Protect and Generate Value

“As companies exit the global pandemic era, there will be an increased focus on how well operations were managed during the pandemic, how quickly the business pivoted, and did it thrive, survive or cease operations.” Espen Vestli, Business Area Director, Azets Insights AS

Company leaders work for years to build their dream business from scratch, and there’s one thing they often have in common — planning a successful exit. Growth and revenue are crucial indicators of success, but when assessing the value of a company, investors will also evaluate how it is structured, the assets created, and the strength of the foundation on which the business is built.

Espen Vestli, Business Area Director at Azets Insights AS, and Kathryn Barnes, General Employment Counsel EMEA, Globalization Partners discussed during their PANGEO panel the difficulties business owners face when planning an exit strategy in a post-pandemic and increasingly globalized market.

“There has to be a proactive approach to planning a business exit. The exits themselves are increasingly challenging because of the global nature of the marketplace, buyers are becoming more sophisticated as a result of rapid technological changes.” Kathryn Barnes, Employment Counsel EMEA, Globalization Partners

One of the most pressing questions for company leaders planning an exit is what is required for a successful sale post-pandemic. Some of the strategies prevail, but scrutinization of operations during the pandemic remains one of key indicators of current and future value for potential buyers. “As companies exit the global pandemic era, there will be an increased focus on how well operations were managed during the pandemic, how quickly the business pivoted, and did it thrive, survive or cease operations,” said Vestli. How well a company operated during the pandemic is quickly becoming one of the key indicators of its overall value.

According to Barnes, businesses must take a proactive approach to planning an exit, “The exits themselves are increasingly challenging because of the global nature of the marketplace, buyers are becoming more sophisticated as a result of rapid technological changes.” This requires companies to ensure they have the data on hand to prove not only key performance indicators (KPI’s), but strict adherence to local rules and market regulations for all geographic areas in which the company operates. An Employer of Record like Globalization Partners can help manage this aspect because historic and current compliance data will meet all regulations in countries in which the company operates. “At Globalization Partners all we do day-in-and-day-out is hire people globally and ensure it is done compliantly,” said Barnes. 

“One of the most common hurdles business owners face during the exit phase is making sure they have ample time allocated and available to keep the company on track.”  Espen Vestli, Business Area Director, Azets Insights AS

Due diligence is becoming more detail-oriented for potential buyers and expectations are increasingly higher for companies post-pandemic. Vestli points out that businesses looking to acquire, expect companies to have the data at hand to prove value. “It’s really important that the business processes are already global, and its organizational backbone is automated and ready for any exit. How quickly can management get the historic and the protected KPI’s to the potential buyer? Does the company have systems in place to protect its global talent and is its model scalable?” According to Vestli, these must be in place before any potential exit is considered.

Barnes added that company leaders looking to exit must consider all the variables to ensure the company maintains its value, but an often overlooked area of every buyout is the potential disruptive effect on the company’s employees. “It’s important to ensure transparency with your team. There is nothing worse than going through an exit and not understanding what is going on.” To avoid frustrating talent, Barnes advises to simply have an open dialogue and ensure that HR is involved in the entire process. 

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