Mergers & Acquisitions – They say selling a business is an art – we’ve turned it into a science
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Let’s TalkThe Art and Science of Building a Spirits Brand for Acquisition
About the Episode
“If you build it, they will come” is an expression that applies to starting a company as well as a baseball field. Thinking about what buyers want and avoiding the pressure to sell in a specific timeframe can help you increase your company’s value when the time comes to sell. With 25 years in M&A in the wine and spirits industry, Guillaume Thomas helps sellers understand what buyers look for in a consumer brand. He also shares how he has used these same lessons to start his own company, which has grown out of his four-generation family cognac business.
“If you build something that is valuable to you and that has sustainability, it will have value to someone else.”
Guillaume Thomas
What You’ll Learn
- Branding: How to build a consumer brand with long-term value and growth potential in mind in the age of social media and influencers.
- Exit Planning: How planning for the eventual sale of a business can impact growth, including what the drivers are behind multiples and how they change specifically in the spirits industry.
- Valuation: The importance of realistic valuations, the impact they have on negotiations, and why it is critical to understand the buyer’s motivations.
- Sales and Marketing: Focus on building brand loyalty with customers and end consumers since the reorder rate is a critical metric in consumer goods for strategic buyers.
Topics Covered
| What is the number one mistake owners make when selling their business? [3:03] | |
| How can wanting to sell versus having to sell impact negotiations? [9:01] | |
| In consumer products, how much does the brand impact the overall value of a company? [15:25] | |
| How important is brand loyalty? [19:57] | |
| How does the craft of M&A compare to the craft of making cognac? [24:24] | |
| What is the best way to think about exit planning? [30:24] | |
| How important are operations decisions such as choosing to internally manufacture a product versus using a co-packer? [35:02] | |
| What are the most common problems a buyer sees in the due diligence process? [40:01] | |
| Other than production costs, what are the two biggest investments in a consumer business? [45:15] | |
| Is there a difference between building a company to sell and just building a good company that’s valuable? [53:30] |
“You shouldn’t be obsessed with selling. You should be obsessed with building a business that consumers love, that retailers love, and that is economically sound and successful in itself. Then you will see that the buyers will come.”
Guillaume Thomas
Want More? Related Resources:
- Selling a Business: A High-Level Overview
- Business Valuation Basics: 9 Critical Concepts to Understand
- Business Exit Plan & Strategy Checklist | A Complete Guide
- Preparing Financial Statements When Selling a Business
Meet Our Guest
Guillaume Thomas blends a corporate background with entrepreneurship as the founder and CEO of Martingale Cognacs, launching the 4th generation family business of crafting cognacs into their own private label. Prior to starting this business, Guillaume spent 25 years in the corporate world, working with PE firms and corporations, focusing on strategic analysis of target companies and their fit with large corporate strategies. He also spent 18 of those years as part of the M&A team for Pernod Ricard in Europe and the United States, working on transactions ranging from multi-billion dollar deals to small bolt-on acquisitions.
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