Consolidation is impacting the tower industry. If you’re interested in selling, now’s a good time to consider it. That’s according to Brian Gramm, Managing Partner at consultancy Seemore Hawk. The firm works with wireless infrastructure service providers about selling their company or buying one. He spoke during the NATE Webinar on Wednesday titled: “Am I Ready to Sell My Tower Business?” aimed at non-tower inventory owners.
Selling or even taking steps to prepare to go down that road, can free up an owner’s time, notes Gramm. “When you have options, you start to have freedom,” and day-to-day stress “plummets,” he explained.
Several drivers impact the value of a business, including financial performance, growth potential and recurring revenue. “When we think about what a business is worth to a buyer,” it’s common to believe, “My business is profitable. It must be worth a lot to someone else,” says Gramm. But many times, he sees service firms with a “hub and spoke” formation, in which an owner controls everything. In that case, “you may end up with a business that is literally worthless without that hub,” he said.
Buyers often pass on those types of businesses. This type of set-up “will hurt” a potential sale or drive down the value, explains Gramm. To get out of that trap, he recommends asking yourself what actions you’ve taken in the past year to make the business less dependent on you. “What are two actions you can take in the next 90 days” to get to that goal, he queries.
Groups are reaching out to tower firms to see if owners want to sell, according to Gramm. When you’re on the phone with someone inquiring about your business, Gramm advises to get clarity on who the buyer is. Many times, people are hired to call companies whose owners may be interested in selling. “If they’re not clear” with you, he advises, “hang up. They’re on a fishing trip.”
“Are they asking for confidential information on an unsolicited call?” If that information is not on your website, don’t share it with them, he says. “Real buyers are not going to ask about revenue or growth rates because they realize this is a two-way street,” says Gramm.
Many factors go into making the decision to sell, including whether an owner must meet a certain financial number, is personally ready to sell and has a plan for the next step in life. A professional in the field such as an M&A advisor can help, he said.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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