Mergers and acquisitions are changing the face of real estate.
According to accounting giant KPMG’s June 2022 mid-year report, nearly 80% of key business leaders surveyed say their appetite for making deals is as strong or stronger now than it was in 2021.
That’s an encouraging indicator for broker/owners who may be looking to grow their company, facilitate its next chapter or explore the idea of a sale as an exit strategy.
But when you’ve spent a career building a firm, you will want to feel confident that the deal you make is the best one you could have struck.
In this RISMedia Premier Exclusive report, we unpack everything a broker/owner needs to know before entering into a sale.
Key topics covered:
- Why brokers sell: Motivation is everything
- Evaluating your valuation: Determining your company’s true worth
- Finding the right fit: Pairing like cultures and business models
- Why communication is key: Negotiating terms before you sign
- Due diligence: The key to a seamless transition
- Your role in the company’s future: It’s a done deal. Now what?
Section 1: Defining Your Motivation
Mergers and acquisitions, as in so many American industries, are changing the face of real estate. “Small companies like to join bigger ones, and larger companies are only too happy to expand into more markets by acquiring smaller ones,” says George Slusser, who heads up the Merger and Acquisition Division at real estate consulting and…
Section 2: Valuation Is Key
“Once you’ve established your interest in a sale, you need to have a clear idea of the true worth of your company,” says Slusser. “That includes both tangible assets, such as operating funds and owned office space, as well as the intangibles—things like the company’s location, culture, broker talent and reputation.” That said, valuation typically…
Section 3: Finding the Right Buyer
When it comes to selling your company, deep pockets are far from the only thing that matters. From culture to mission to vision to business model, finding the right fit for the future of your firm is critical. “First and foremost,” says Slusser, “buyer and seller should share similar cultures and business models. That’s the…
Section 4: Communication Is Key
Once the deal is done, how do you keep your agents, staff, clients and stakeholders engaged and eager to work for and with the new owners and/or management? “For me, it was a matter of controlling the story,” says Cantrell. “I was confident that my people stood only to gain by this deal—which was what…
Section 5: Due Diligence
What does it take to ensure a smooth transition once the deal is done? For a buyer, due diligence means making sure you are getting the asset you are paying for, notes McLaughlin. For the seller, it means having a good grasp on the details of your own business and how the synergies with your…
Section 6: Your Role in the Company’s Future
Coming full circle to your initial motivation for exploring the sale of your company is the question of what role you will play in the new entity going forward. For brokers like Hanks, Cantrell and the Rand team, signing on the dotted line was predicated on their intentions to stay in their leadership roles for…
