There are many reasons why business owners engage in Corporate Social Responsibility (CSR) programmes, and absolutely none of them involve increasing the value of your business to an acquirer. But, your CSR track record may be more than something for you to be justifiably proud of – don’t underestimate the value of giving back! As you start the process of selling your business, you may find it opens up new opportunities for leveraging the right deal with acquirers.
In a previous blog, we looked at 5 factors that will impact the value of your business… The jury’s out on whether CSR affects market values in monetary terms, but it is certainly another factor which is increasingly important to both vendors and acquirers. A strong track record in this area, therefore, may increase your desirability in an acquirer’s eyes – which could in turn have a positive impact on your Enterprise Value.
CSR is a business’ contribution to societal goals that make an impact, create values, affect lives, or other ethically oriented practices. CSR makes everyone feel good, and helps your staff feel like they are doing more than generating profit… CSR is also great PR and contributes to a brand’s reputation. This, in turn, helps to deliver differentiation in a crowded marketplace. We have talked many times about how acquirers are looking at more than just the bottom line when they are considering an acquisition. The strategic alignment, future goals, brand reputation and integration of a prospective acquisition is also highly significant. CSR can be an important factor in all these things.
Synergy has always been a key element of acquisition decisions, and it makes sense that CSR may be a significant desirability factor within synergy. This could either be as an element of strategic fit between organisations, or as an opportunity for an acquirer to benefit from already established CSR practices. Well-established trust and/or developed relationships with stakeholders via embedded and successful CSR practices, is understandably attractive.
A good example of the role of CSR in a successful acquisition is the recent Entrepreneur’s Hub-led deal for Alerter Group Ltd. Alerter is a technology company with CSR at its core, providing emergency communications systems for people with sensory and physical disabilities. It was important for business owner, Steve Haseldine, to find a home for his business that would remain true to his mission and maintain the societal benefit Alerter Group had delivered.
Alerter Group Ltd was acquired by Sdiptech AB (publ) a Swedish engineering company providing technical services and products for urban infrastructures. Alerter Group’s CSR credentials were significant in attracting Sdiptech to the deal. Read our case study Entrepreneurs Hub advises on the sale of Alerter Group to Sdiptech for the full story.
When you sell your business, it is critical to market to the right prospects and present its attributes in the most appropriate way. It’s also hugely important that you find a suitable home in terms of ethics and values for your company and staff. At Entrepreneur’s Hub, our experienced M&A Advisors work with you to develop a picture of your ideal acquirer, draw out the key aspects of your business which will interest them, and will continue to identify synergies and opportunities as the deal negotiations progress. We’d love to talk to you, free and in complete confidence, so why not get in touch?