PR’s Role in Attracting Acquirers
6th June 2014
Often, as the economy improves, the actual objective behind public relations and brand awareness is to attract acquirers. In my experience it’s often consultancies – rather than in-house teams – that are tasked with this challenge. Why? Because many executive teams want to avoid unsettling their workforce by outlining ‘exit’ as a corporate goal.
Understanding the role of PR in exit, therefore, is a valuable part of the PR consultancy toolkit. As you’d expect, companies do not attract acquisition interest by accident. They have to work specifically at generating awareness, tempting acquirer interest and, ultimately, winning the exit they are targeting. These campaigns are subtly but importantly different from ones focusing on sales lead generation or improving brand awareness.
For starters, the content and channels used need to mirror the ways in which potential acquirers identify and investigate target companies.
Some of the most consistently relied-upon information sources include:
- Traditional research – media coverage, publicly available research, specialist blogs, trade associations and conference proceedings are all key information resources for researching acquisition targets. Which makes them vital targets in campaign planning.
- Analysts and consultants – it is not widely appreciated, but industry analysts and consultants do a lot of acquisition long listing, targeting and due diligence work for those on the acquisition trail. These individuals are critical targets
- Networks and networking – acquirers will often use their own informal networks, alongside specific networking events, to research targets and gather advice. This makes compelling, regular and targeted media coverage and amplification efforts all the more important.
So if these are the channels and information sources to focus on, what messages resonate?
There are certain company assets that heavily impact valuation, and which need to be highlighted and showcased through marketing efforts:
- Vision – whatever the acquisition’s drivers, the vision of the target company is critical. It drives the direction of the business, the types of customers it has and the development of its products. Clearly communicating a strong, distinctive vision therefore demonstrates that a company is a good long term bet, worthy of close attention.
- Strong IP - how well are a target company’s technologies, products or processes protected from competitive forces? Does your client have a sustainable core competence or a transitory competitive advantage?
- Experienced leadership team - acquirers will often be drawn to companies with a well-credentialed leadership team that is already well-known, or that can be trusted and respected. Showcasing executives’ track records in innovation, disruptive propositions or strong delivery will always inspire confidence amongst acquirers.
- Robust sales pipeline - showing potential acquirers the substance behind the vision and the market interest in the product or service is an essential part of attracting attention.
- Strong marketing function – proactive outbound marketing activity shows that the company is serious about lead generation, revenue and profile and has effective mechanisms in place. Frankly, if the marketing is performing, it will take less time for investors to start seeing a return.
Finally, how does a marketing team best articulate and emphasise these assets to acquisition audiences?
- Clear messaging - in order to best demonstrate your important assets, the manner in which you describe yourself must tell the right story. Does it illustrate your vision and strength, or the headway already made in your market? Is it concise, comprehensible and evidenced? Does it strike the vital balance between genuine market differentiation and dangerous over-hype?
- Have a strong vision for your market - do you have a new view on the market? Have you researched an aspect of the market that simply has to be understood better? You could be a unique company with powerful messaging, but if you have nothing different to say, you have no way of attracting and holding attention.
- Recognition and credibility - journalists and analysts are important third party endorsers for acquirers, making press coverage and analyst mentions vital. Also, seek out award schemes to enter, and conferences for your senior team to speak at. And remember to make it easy for acquirers to find all of this – too few companies showcase their momentum by collating this industry attention in a single place on their websites.
- Consistency and variety - investors have seen hundreds of companies purporting to be “the next big thing”, and many have disappeared with promises left unfulfilled. So when a company appears throughout industry media, in every analyst report and on every podium available, but then goes quiet, investors will suspect the worst. The silence may actually be perfectly justified, but a perception of being unstable sticks.
A strong, targeted PR campaign is a vital part of any plan to be acquired. And given the sensitivities involved, it’s not surprising that executives are seeking external counsel to ensure their companies are positioned appropriately.
Richard Fogg is Managing Director of CCgroup, a B2B technology PR agency. In the last three years, CCgroup has helped ten companies exit and compiled a whitepaper to help others learn from this experience