Written by Cheryl Beth Kuchler, CEO Think Tank
STRATEGY TO EXIT
Rich Manders of Freescale Coaching grew his company, iAutomation, to $12Million with $2.5M in EBITDA and sold 75% of the business back in 2007. Over the past decade the company has continued on a growth track reaching over $100M in 2016.
During the acquisition process, the acquiring Private Equity firm, Riverside Company, used the “SPARKLE” model as a checklist evaluate the company’s value. Each letter represents an aspect of your business that should “sparkle” and if your business doesn’t, the acquiring firm wins.
At the 2016 Harvard Innovation Symposium, Rich shared the model and explained how buyers use the checklist to determine the price of a business. HINT: The more a company SPARKLES, the more the right buyer is willing to pay.
I highly recommend watching the entire presentation – about 43 minutes. If you’re time-strapped, however, you can read a recap of what each letter stands for here.