Fortune 500 Sale - Stop! Do Not Touch!

Posted by Walt Brown on Nov 18, 2020 4:30:00 PM

Recently one of my client's sold his 1,100 person company to a Fortune 500 company that is in the business of rolling-up and running like-like companies; 120 or so until they bought my client's non-like-like company.

It was a fat deal requiring attention to hand-off and take over. Part of this hand-off was a big hoopla where the Fortune 500 Company CEO came down from NYC to talk at a celebration banquet and to mingle with the folks in Raleigh.

My client introduced me to  CEO "Tony" and of course I button-holed* him and went to quizzing**.

Tony: "Walt, this is the most organized company we have ever bought."

-- They had bought over 120 at this point --

Walt: "What do you mean by most organized."

Tony: "... certainly they were organized financially, but, it was beyond that, they are organized around how they operate, they are super organized around who is doing what and they have a clear definition of who they are with systems to maintain it, all the key intangibles."

Of course I am hearing: Clarity and Consistency around how you Operate, how you are Structured and how you define and maintain Culture and Engagement. This is one of my clients he is talking about and I am thinking; "Damn it actually worked."

Walt: "Did being organized make a difference in valuation?"

Tony: "It is hard to put that into valuation multiple terms (air quotes) because we would have never touched this type of company in the past, without them being organized like they were, we would have just skipped over them, so the multiple would have been 0, right?

-- Then a big hollywood smile, and a dramatic pause --

Tony: What is that in multiple terms? Infinity?"

-- Then he put his hand on my shoulder, patted it twice and smiled. --

Tony: "Nice meeting you Walt, good job."

Walt: "Wait Tony, one last question, what if it had been a like-like company, one of the normal companies you guys buy, what is a valuation comparison in that sense."   

Tony: "Plus 20% Walt."

In my day to day, the irony is this, when we start working with owners they are often thinking about setting up to sell.  However, after we help them regain lost momentum and make it easy to keep the momentum by creating clarity and consistency in how they Operate, Structure and maintain Culture and Engagement they have a tendency to forget about selling because they know they are doing all the right things to be set up for if / when the sell intersection comes up.

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Assessment Area Framework
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As a reminder: We run programs that teach you how to fish, teach you how to create Operational Clarity and Consistency (EOS®), how you Structure (Organizational Cognizance™) and how you create and maintain Culture and Engagement (7 Question - 7 Promise Framework™). 


* To "button-hole" is to figuratively put your finger through their jacket button-hole and hold them near, pulling someone into a private conversation in a crowd.

** "Quizzing" is to ask a bunch of questions that link to each other - taught by southern gentle ladies. 

Topics: Operational Clarity and Consistency, Cultural Clarity and Consistency, Structural Clarity and Consistency

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