Exitability is assessed by evaluating the company’s fundamentals. Fundamentals include the historical performance of the company, the industry and market attractiveness of the industry in which the company competes, and the growth potential of the company. It is important to determine if a company has substantial issues, which could lead to negative repercussions during a transaction process. Likewise, it is important to identify strong points going in the company’s favor.
Depending on the Exit Horizon, the opportunity may exist to neutralize blemishes and amplify strong points. In most situations, a company can build additional value and improve its exitability by:
- Converting a company’s growth potential into a definitive growth strategy to substantiate how the company will achieve its growth targets;
- Improving the industry and market attractiveness by deliberately repositioning the company through market research, competitive analysis, and strategic assessments;
- Transitioning from passive historical performance reviews to active, ongoing performance benchmarking by comparing the company’s performance and risk profile to other private companies of similar size in the same industry.