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What Your Firm Needs to Do to Be Acquired in 2018

January 9, 2018 | Telepresence Options


Story and images by AV Network

2017 was another extraordinary year in the AV sector. Now that the digital ink has dried on one of the most transformative acquisitions of the year (Sharp's AV was sold to AVI-SPL), small to mid-size AV firms are beginning to wonder if 2018 will be another active year for mergers and acquisitions (M&A). I remain confident, due to strong market fundamentals paired with the high levels of optimism among owners, that it will. More specifically, listed below are the reasons to understand why I remain bullish:

  • Valuations of AV systems design and integration firms are still attractive;
  • Continued technology convergence as industry is going through structural changes;
  • Low interest rates;
  • Need to scale in order to compete;
  • Other private equity groups are noticing those investments, renewing the attractiveness of the AV vertical;
  • Foreign firms are actively looking to acquire U.S. platforms.

As important as the sector is, the actual profile of each potential seller is much more influential to their sale-ability. While different growth strategies are resulting in more deals being done, the main question is what does your firm need to do in order to be acquired in 2018? Buyers seek a company that is well positioned for growth with the following qualities:.

Profitable Growth
Markets in general reward firms that achieve ongoing profitable growth. Companies in the AV industry are not immune to that basic tenet. Simply put, acquisitions that are not accretive to growth suck resources away from internal activity. Instead, accretion supports the virtuous cycle of balanced growth in both internal development and external activity. Sharp's signature managed services business, Rapid Care, was one of the fastest and most profitable programs in Canada.

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