May 29, 2013

Create a strong base before selling your technology business

What are crucial factors to keep in mind when you have decided that it is time to sell your technology business? Obviously, you want a good price, but it is necessary to do some legwork to ensure that the acquisition process runs smoothly and that your organization stays profitable through the entire transaction.

Not only is it important to set defined – and realistic – goals, but technology company owners should work to find capable buyers, according to a contribution piece in the business blog Inc. 

"Many buyers require that the seller stay vested in the business post-transaction in the form of minority stake, options, or some form of advisory service to ensure an effective transition," the article said. "Accordingly, seek a buyer equipped with the skills and resources to execute on their business plan so the value of any remaining stake is preserved."

When a technology business owner is able to find a company with similar values, and a willingness to keep the original bottom line intact, it will be much easier to move forward in any M&A activity.

Software AG acquires Longjump

One example of a successful technology acquisition is Software AG buying Longjump, a cloud platform-as-a-service (PaaS). According to a Software AG press release, this is an ideal opportunity for the two companies to give small and medium-sized businesses a way to rapidly develop applications with less involvement from IT.

Essentially, customers will have more options, as applications can be deployed on public and private cloud services, on premises and through mobile devices.

Technology mergers and acquisitions are ideal opportunities for businesses – both the buyer and the seller – to create strong futures for themselves while also helping their customers in the process.