In our technology focused mergers and acquisitions practice we are often approached by an entrepreneur saying, "I want to sell my company for strategic value." This article explores what strategic value means and why a buyer would pay more than an EBITDA multiple for a seller's company.
Traditional valuation techniques focus on easily quantifiable metrics such as EBITDA, revenue, and projected sales. These models fail to capture the leverage of technology and strategic value.
It can be intoxicating for a business owner to be approached with an unsolicited offer from a larger company to buy his/her company. Smart buyers want to limit the process to a single buyer.