Buy, sell or hold: Defining an Owner Group’s triggers for M&A
STRATEGIC ADVISORY
Context
The Owners’ Council of a third-generation business was operating without a clear set of medium-term objectives to drive their oversight role. Following M&A activity in their sector, it became clear that the group lacked alignment on how to evaluate potential opportunities to sell their business – or whether they should proactively pursue a sale pathway and allocate the funds into their investment office portfolio.
Recognising the need for greater clarity and a structured decision-making framework, the owners engaged us to help navigate this critical juncture.
Work
Our partner led a strategic assessment of the business from an owners’ perspective and a comparison against the return profile of strategies in-use within the investment office portfolio.
A central focus of the work was helping the owners to align on an appropriate cost of capital. Part of this was educational, part analytical. This led into a broader discussion around the minimum expected total shareholder return for the business, shaping clear expectations for performance.
Target debt levels and expectations around future dividend payouts were also defined, becoming part of a formal ‘mandate’ that could be passed to the operating company board. This mandate could be used as an assessment matrix to be applied periodically, equipping the Owners’ Council with a structured and repeatable process for evaluation.
Impact
The newly developed mandate was communicated to the business board and integrated into the strategic plan. With clear financial expectations and defined decision triggers now in place, the Owners’ Council is positioned to make timely, informed decisions about pursuing a sale or responding decisively to inbound offers.