CompositesWorld
Issue link: https://cw.epubxp.com/i/576646
8 CompositesWorld PAST, PRESENT & FUTURE OCTOBER 2015 opportunities where the commercial concept is proven and scaling the business involves developing sales and marketing channels. Any large investment in capacity makes the acquisition less attractive for them. • A strategic or trade buyer. Typically a large business buying up a smaller business, a trade buyer expects to see strong synergy benefts for their business, as well as the all-important return on investment. A large trade buyer often brings an operational capability that can add and efciently manage capacity. Alternatively, if you're considering an initial public ofering (IPO), you need a very aggressive growth story and/or a very compelling investment hypothesis to appeal to potential share- holders. You must demonstrate a proven commercial concept, the need and opportunity to scale the business, and that the scale-up opportunity is signifcant. A fnancial investor typically wants to partner with existing management over an agreed timeframe. With a trade buyer, there might be an agreement that you continue in management, but that's less certain. (Te IPO route is expensive and can be lengthy, but it is possible to maintain control of the business.) What is your company's actual worth? Tis is the time to formulate some idea of the company's value. Table 1 (p. 6), for example, lists recent and in-progress deals and the value of the target frms. Te composites industry is broad in scope, and so can be the valuations, but there are commonalities. Multiples of revenues, profts, gross profts and more can all be explored and tested with the help of advisers who have up-to-date knowledge of the present and future market indicators and the likely buyers. What will your buyer actually be buying? A diferentiated and compelling proposition is the most valuable sales tool you have to sell your products. Defne exactly what your business is: its tech- nology, its markets and its customers. Demonstrate a complete and thorough understanding of your target markets, and why you are competitive in those sectors. Be prepared to show a buyer the realistic growth opportunities for the business — validated, assessed and with evidence. If your assessment forecasts growth that exceeds the expected market growth, then you need a strong argument outlining why your frm will perform better. Fast growth is limited. In manufacturing, you are part of a supply chain. Investment in people, facilities and equipment is required, and it takes time for new composites technologies, materials and processes to prove their utility and quality, as well as the robustness of their delivery and consistency. Te growth rates and proftability levels and, therefore, your return on invest- ment, will be more modest than if you were in the IT sector, where frms can spring up and attain high valuations in months. On the plus side, if you have established a strong niche, there is a much-reduced risk of the business failing because the customers who use your products have fewer options. As a result, you can command a higher valuation. Where do you sit in the value chain? Your position here, and the dynamics of your supply chain, are a core piece of your INTERNATIONAL INC. EUROPE Sarl ASIA LTD ADVANCED MATERIALS LTD www.airtechonline.com Scan this Watch a video on Wrightlon ® 5200 & A4000! Wrightlon ® 5200 Elongation: 350% Use Temperature: 500°F (260°C) A4000 Elongation: 300% Use Temperature: 500°F (260°C) -Available in Bonded One Side (BOS) Airpad Rubber Fabrication bonds well with A4000 BOS‐ Excellent elongation and strength reduces bridging in corners, avoiding scrap or rework. High visibility colors can reduce risk of FOD and leaving flm on cured parts. Color options help differentiate perforation styles. Easy release off cured parts, leaving excellent fnish. Widths up to 160 inches (4 m) without heat seams. A4000 Wrightlon ® 5200 BENEFITS