If you have been following our M&A Masterclass series, you will have heard the term “seller incubation” occur across multiple episodes.
Seller incubation is a service offered by Lion People Global which provides support to company owners who are looking to sell.
Types of support include professional services, which can be in the form of specific, tailored, hyper-personalised consultancy in the areas that they need, or investing in key hires.
As well as this, we provide a seller-side agreement that provides companies looking to sell with access to large scale buyers that typically have revenue in billions, which these companies would otherwise be unable to access.
These large companies don’t pay buy-side fees to brokers because they may have an expensive M&A team in-house and so they don’t feel that they should, or they are simply not allowed to engage with brokers due to corporate governance.
So in cases such as this, it is the seller who pays.
Lion People Global provides our seller-side clients with access to very large buyers, including buyers outside of the language services industry, that are interested in LSPs.
And because these companies are very large, private equity-backed and they have large M&A teams, they are not going to engage with brokers.
So for companies that want to sell, the only way to gain access to these blue chip buyers is by getting into an agreement with companies like Lion People Global that can make those introductions and then also support the entire process and see the deal through.
Lion People Global are proud to have brokered the deal between PEP Group and Locaria, Stagwell’s multilingual content agency, which completed in July 2022.
PEP Group founder Mikhail Pimenov was a seller-side client of Lion People Global and believes the deal would not have been possible without Lion People Global’s introduction.
“I asked this question to Lindsay [Hong, Locario COO]: what’s the probability of you finding out about us without this brokerage – without this way of being introduced? And to be honest with you, the probability is very low,” Mikhail said.
“So if you are considering selling, if you want to find a strategic partner, you will get the chance to put yourself in front of a bigger player and see if there is a match.”
For Lindsay Hong, Chief Operating Officer of Locaria, Mikhail’s seller-side agreement with Lion People was a strong signal of intent which made them sit up and take notice.
“Stagwell very publicly announced its intention to go about doing M&A, so it’s not necessarily short of offers and therefore we don’t really sign buy-side agreements,” Lindsay said.
“The other thing about sell-side agreements is – particularly in owner-operated businesses – it’s a very strong indicator of willingness and readiness to sell.
“So you feel confident that this person is actually motivated to go through with the deal and they’re not just fishing around because they’ve been running their business for 16 years and they want to get a valuation and see how they feel about it. They’re actually really going to do this.
“And buyers want to get deals done in the current environment. So it’s a strong signal that you are keen to get a deal done and I don’t think we would have met if it hadn’t been for Mikhail being a sell-side client of Lion People.”
If you want to know more about this area, visit Lion People Global’s website where you can watch back our M&A Talks series of videos and fill out a questionnaire that entitles you to one hour’s free consultation on getting a LSP or language tech business ready for sale.