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Attracting an Unsolicited Offer At A Strategic Business Valuation

Has someone ever approached you and made an offer - for your business?  Was the offer at a strategic business valuation?

Unsolicited offers don’t come along very often.  And it is critical that you know immediately whether the offer is above or below market value. 

So when an unsolicited offer is made there is a window of opportunity where:

  • You can have the MOST influence at any stage of the transaction process.

  • You can lead with the key benefits a buyer will receive

  • And therefore you can dictate the PRICE your business is worth - TO THEM!

What Makes a Business Highly Valuable?

Attracting an unsolicited offer requires some key features in your business that someone else wants.

Exit Value Advisers recently gave a presentation on the key drivers of value and some ideas to start making your business attractive to others.  It gives some of the actions that you need to do to make your business more attractive and more valuable.

This presentation is completely free – no need to enter your email - just click the “Download Value and Drivers” button.

What are Strategic Business Valuations?

Most business valuations are valued on the basis of what will ANY person pay for the business.  In other words, given the expected cash flows and risk profile, what is the business worth to anyone?  This is the basis of MARKET value.

But this definition ignores the range of SPECIFIC benefits that a PARTICULAR buyer will receive from your business. The concept of particular benefits that accrue to a particular buyer is what we call STRATEGIC value.  We have explored the concepts of types of value in more detail in this business valuation article

A Strategic Business Valuation looks at the price that one party is prepared to pay to achieve all the benefits from acquiring your business.

Examples of Sales at Strategic Business Valuations

  • 2018: St David Dairy sells for $15.25m to ASX listed food supplier Longtable Group.

    • Historical EBITDA multiple of 11.3x.

  • 2017: 14 year-old digital marketing agency The Works was purchased by ASX Listed IT company RXP for $33m

    • EBITDA multiple of 8.5x.

  • 2018: ASX listed Wisetech Global Ltd paid $20m upfront cash to acquire SmartFreight in a strategic move aimed at securing the software capability.  Smartfreight EBITDA for FY18 was $1m.

    • They acquired the technology (with an additional earn out not yet factored in) on a 20x multiple!

These are not just examples of “big business” either:

  • St David Dairy had FY17 revenue of $4.5m!

  • Smartfreight had FY18 revenue of $7.9m!

  • The Works had revenue of $16.5m after 14 years of growth!

These are normal SMEs that have delivered growth, focused on a niche and made themselves attractive.

And their results didn’t happen overnight or even within a year or two of starting.  It took St David Dairy 6 years to build up to their $5m revenue.

In each of these examples the businesses:

  • Attracted an unsolicited offer.

  • Achieved a Strategic Business Valuation

What is an average business worth?

Based on ABS statistics, we have researched what a "typical" SME looks like: 


  • The average revenue growth rate for SMEs is 2% - 3% pa

  • The average profitability is 14.5% (EBITDA margin*)

  • The majority of businesses with revenue less than $2m pa will sell for a multiple of less than 2.0x EBITDA

  • *EBITDA – Earnings Before Interest Tax Depreciation and Amortisation (it is a “cashed up" measure of profitability).

We have detailed this information in our latest whitepaper - State of SME Performance.

This means that most businesses are worth less than $150k.  

Is this enough for you to retire on? 

Does this seem a fair price for your hard work, stress, loss of lifestyle and investment?

DIY Online Business

Valuation Guide

Attracting an Offer at a Strategic Premium


Exit Value Advisers have helped many clients attract unsolicited offers at a strategic premium.  Some of the key factors include:

  • Focus on a niche with a high level of differentiation

  • Create size and scale

  • Use technology to leverage your opportunities

  • Get the fundamentals of the business right

  • Make the financials attractive and the synergies even more attractive

  • Proactively promote to and seek out strategic buyers

We have a 4 step remotely delivered program that looks at the fundamentals you need to work on to attract an unsolicited offer and develop a plan of action:

  1. Understand your business value

  2. Will you sell for a premium now?

  3. What can you do to increase your business attractiveness?

  4. Attracting unsolicited offers

If you want to start working on increasing the value of your business and attracting an unsolicited offer for your business then click the Find Out More button below NOW 


EBITDA multipe
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