~๐ฎ๐ฌ๐ !!! ๐๐ ๐บ๐ถ๐ด๐ต๐ ๐๐ผ๐๐ป๐ฑ ๐น๐๐ฑ๐ถ๐ฐ๐ฟ๐ผ๐๐, ๐ฏ๐๐ ๐ถ๐ ๐ถ๐๐ป’๐. Welcome to the world of strategic mergers and acquisitions (M&A).
This was the case when LiveRamp, a public company with approximately 1500 employees, recently announced its plans to acquire Habu, a 5+ year old business with around 50 employees, for roughly $200M. Of this sum, $170M was paid in cash.
So, why would LiveRamp pay:
- 20 times Habu’s sales when RAMP is valued at 3x?
- Over $4M per employee?
- 50% of its cash reserves?
- 20 times its own Net Income?
๐ง๐ต๐ฒ ๐ฎ๐ป๐๐๐ฒ๐ฟ ๐ถ๐ ๐๐ถ๐บ๐ฝ๐น๐ฒ – ๐๐ถ๐๐ฒ๐ฅ๐ฎ๐บ๐ฝ ๐ถ๐ ๐ฝ๐น๐ฎ๐๐ถ๐ป๐ด ๐๐ต๐ฒ ๐น๐ผ๐ป๐ด ๐ด๐ฎ๐บ๐ฒ. The company is focusing on:
- Tech: Habu’s cutting-edge data privacy technologies are invaluable in our current data-driven business climate.
- Team: Habu boasts a respected team that injects high-quality talent into LiveRamp.
- Growth: This acquisition has the potential to accelerate LiveRamp’s growth by creating new revenue streams.
The takeaway? When you’re selling your business, remember that ๐ถ๐’๐ ๐ป๐ผ๐ ๐ฎ๐ฏ๐ผ๐๐ ๐๐ผ๐๐ฟ ๐๐ถ๐๐ฒ; rather, it’s about the problems you’re solving for the buyer. ๐ง๐ต๐ฒ ๐ธ๐ฒ๐ ๐ถ๐ ๐๐ผ ๐๐ฒ๐น๐น ๐๐ผ๐๐ฟ ๐๐๐ผ๐ฟ๐ ๐ถ๐ป ๐ฎ ๐ฐ๐๐๐๐ผ๐บ๐ถ๐๐ฒ๐ฑ ๐๐ฎ๐. By appealing to the buyer’s need for growth, innovation, and talent, you can unlock true value for yourself. ๐ก๐ฒ๐๐ฒ๐ฟ ๐ถ๐ป๐ถ๐๐ถ๐ฎ๐๐ฒ ๐ฎ๐ป ๐ &๐ ๐ฑ๐ถ๐๐ฐ๐๐๐๐ถ๐ผ๐ป ๐ฏ๐ฎ๐๐ฒ๐ฑ ๐๐ผ๐น๐ฒ๐น๐ ๐ผ๐ป ๐ฝ๐ฎ๐๐ ๐ฟ๐ฒ๐๐ฒ๐ป๐๐ฒ๐ ๐ฎ๐ป๐ฑ ๐ฝ๐ฟ๐ผ๐ณ๐ถ๐๐.
