Team eCommerce Next interviewed Mr.Chris Shipferling from Global Wired Advisors to get more insights on M&A Industry and trends. Following is our interview with him:
What is the current M&A environment for e-commerce?
While the M&A sector is mostly holding their purse strings for most investments as they wait to see how the Pandemic unfolds, e-Commerce is booming right now and this is where investors are investing the most right now. They are looking for strong e-commerce brands with consistent revenue, year on year growth. Also, SaaS vendors helping e-commerce companies perform better and are also growing rapidly have their attention.
Who are the buyers for these companies?
Private Equity, Family Offices, and Corporate/Strategics looking for roll-up opportunities.
What are the current valuations?
Buy-out valuation multiples of EBITDA have remained steady to marginally positive throughout the COVID-19 pandemic. Recent trends are showing more upward pressure on valuations as more private equity funds and corporate acquirers are turning their attention to being opportunistic instead of defensive. Global Wired Advisors sees valuation multiples moving materially higher over the next 6-12 months as the macro-economic headwinds from the pandemic (and response to it) subside. The holiday shopping season for 2020 will likely be a very impactful datapoint for e-commerce valuation multiples as future forecasts from acquirers will use it as a baseline to adjust from.
What are 3 things I can do now to prepare for an eventual exit?
- Organize your books and hire a professional CPA. Get your financial statements cleaned up. This would include your monthly P&L statements as well as an updated Balance Sheet. This will properly reflect the financial health of the business.
- By cleaning up your financials you are able to properly understand where you can hire to alleviate any current bottlenecks in any given function to create better throughput. EG: You have identified your weakness is Inventory Management. You can hire someone part-time or on a fractional basis, full time, or deploy software to automate this function for you.
- As a Consumer Products company, product road maps are crucial to painting the future. These need to be thorough and detailed so a potential acquirer fully sees the product vision for the business. Mature CPG businesses live and die by the product road map and a proper channel strategy.
What is the difference between an Investment Banking/M&A Advisors versus a conventional business broker?
Your business is one of the most valuable assets you will ever sell, so it’s critical to get it right the first time and retain the absolute best intermediary to represent you in the transaction. While brokers and advisors can act as intermediaries, their strategy often involves generating sales volume through fast, lower-value transactions. This results in a cookie-cutter process that leaves a lot of the work up to you, the Seller, and does not always end with a satisfactory transaction.
By contrast, an experienced Investment Banking professional can draw on a deeper level of expertise to provide a more sophisticated approach. From conducting an exhaustive review of every aspect of your business and calculating its true value with pinpoint accuracy to developing high-caliber marketing materials and shopping the deal with a shortlist of vetted, pre-qualified buyers, they are personally involved in guiding you through each phase of the sale. With an experienced Investment Banker in your corner, you can trust that you will get the best deal possible.
Exceptional Representation for the Optimal Outcome
The hard part is over; you’ve put in the work to transform your business into an extremely desirable asset. You owe it to yourself to work with an intermediary who appreciates the effort you’ve put into each and every aspect of your business, who will not settle for anything less than what you deserve, and who can draw on their wealth of professional knowledge and experience to earn you the maximum value in a sale.
The right intermediary can help you achieve most of, if not all, your goals in an exit. Perhaps you’re planning to follow the sale of your first successful business by launching a new venture, or maybe you want to retire and spend more time with friends and family. Whatever your long-term goals may be, no matter what comes next for you, if selling your business is the first step towards achieving them, then you deserve the very best representation you can find to help secure your personal and professional future.
What does the process look like?
Selling a business is a multi-stage process that begins with understanding your business and its operating environment. This allows an experienced Investment Banker to optimally position your listing and highlight its full potential, ensuring the best strategic fit. Upon taking your business to market, your Investment Banker can leverage this information to launch a highly effective marketing campaign across the full buy-side space, matching you with the ideal buyer and deal structure.
The goal is to guide you through a more sophisticated M&A process that yields the maximum value in a sale transaction. As your business represents a tremendous financial opportunity, it is crucial to fully capitalize on that opportunity and secure your financial future.
About Chris Shipferling
As the first point of contact for our clients, Chris offers invaluable insight to help sellers and buyers reach their full potential before and during, and after the sale of their business. Chris also serves as the Head of Business Development for Global Wired Advisors, leveraging his background in sales and digital marketing to grow our brand. For the past seven years, he has focused exclusively on high-level consulting for multi-million-dollar omnichannel, digitally native, and Amazon-based private label and re-seller brands.
Chris is especially adept at finding Client Companies that are poised for sale, guiding them through the initial steps, and preparing them to make the best possible first impression. Chris enjoys working closely with owners throughout the process of selling their business, getting to know them on a personal level so that we can better assist them in realizing their goals.
About Global Wired Advisors
With over 20 years of experience working for household investment banks — such as, Citibank, Wells Fargo, Bank of America, and Deutsche Bank — in addition to various hedge funds, Global Wired is uniquely equipped to be your trusted guide, whether you are looking to scale or an eventual exit. Global Wired has over 70 years and hundreds of billions of dollars of investment banking, e-commerce platform building, and M&A experience, and have brought their Wall Street experience to small business America.