"The most important part of M&A in the E-Commerce sector is to understand the nature of the beast. The strategy behind selling a middle market website or portfolio of sites is not even vaguely similar to pursuing a Bricks and Mortar exit. This is a coveted space that draws a lot of attention from the best of the best. Technology, and its various sectors, is ever growing, and all research points to the fact that it will continue to do so. As new generations of retail consumers emerge and prefer to perform a large percentage of their shopping online, eCommerce retail sales are replacing an older generation that is more hesitant when it comes to shopping on the internet. Younger and middle age Consumers are now tech savvy, and very comfortable with all aspects of using the internet for everything they do, especially utilizing their buying power to buy the goods and services they need in their daily lives. This is creating a dynamic front for those that have successfully found a way to generate income on the internet, thus raising the value of eCommerce companies exponentially, especially those with earnings greater than $1 Million annually.
The power and growth of this sector is easily discernable by reviewing the value of technology companies when they are funded, and when they exit. Because of these valuations, and the value that can be added to existing portfolios through smart acquisitions, regardless of the location of the buyer entity, the pool of potential suitors can come from across the globe. Our focus at ValleyBiggs is in the technology sector because that’s where our founders are the most comfortable. They have purchased, started up and operated a large number of tech companies, so when it comes to finding and maximizing shareholder value, ValleyBiggs is the place to start.
From a Buyer’s perspective, acquiring an eCommerce company in the middle market must be decisive and aggressive because there’s a tremendous amount of people literally waiting at our doorstep as we release each new deal. Part of that is attributable to our marketing tactics, but just as important is the value of the sector in the eyes of those with buying power. High earning eCommerce companies are in very high demand and we know how to maximize their value on exit. So, if you’re a tire kicker, we’ll know very quickly – and we’ll pass you by to find the real players. Our job is not to talk about getting deals closed – but to close them. We will not waste our time with buyers or groups that talk a big talk, but fail to move aggressively to get the deal under contract. While you are kicking tires, others are drawing up offers. And the best news is that the multiples will be higher due to the dynamics of this sector and the strong demand for the high value targets – that’s why we have devoted our firm to solely operate in this sector. We know it and we see the value in it.
