We have both a private equity firm and a direct strategic competitor looking at us. The PE firm is valuing us on a straight multiple of EBITDA, while the strategic buyer is looking at synergetic cost savings. How do we leverage these different valuation frameworks to bid up the final purchase price?

Question

Tyler Smith · Accepted Answer

To maximize your valuation, you must run a structured competitive process that plays these two buyer types against each other. They value your business using entirely different economics, and you must tailor your positioning to exploit those differences.

For the private equity firm, focus on scalability and operational stability. Emphasize that your leadership team is fully aligned, using EOS® tools to run the business independently of you. Highlight your high-margin revenue and cash flow predictability. This appeals to their need for a stable platform asset that can support debt service and future add-on acquisitions.

For the strategic buyer, focus on synergies. Map out exactly how your operations, proprietary workflows, and customer base will integrate with theirs. Calculate the redundant overhead they can eliminate, such as back-office salaries, shared software licenses, and facilities. Present this as a synergy-adjusted EBITDA, showing them the true value of your business once integrated into their larger machine.

Use the interest from the strategic buyer to push the private equity firm to pay a higher multiple to avoid losing the asset to a competitor. Conversely, use the clean structure and speed of the financial sponsor to force the strategic buyer to pay a premium for their anticipated cost savings. By maintaining tight control over the bidding process and communication, you force both buyers to put their best possible terms on the table.