5 Strategic Ways to Make Your Business Attractive to Buyers
When Facebook acquired WhatsApp for an astonishing $19 billion in 2014, it sent shockwaves through the business world. At the time, WhatsApp had around 450 million users and generated far less than a billion dollars in annual revenue. So why did Facebook pay more than 40 times its revenue for a company that charged just $1 per year after the first free year of service?
The answer lies in strategic acquisition. Unlike financial buyers, who focus on future cash flow and profits, strategic buyers consider what a business is worth once integrated into their own. In other words, they evaluate the strategic value—the growth, efficiency, or market dominance it can bring them.
For WhatsApp, Facebook saw more than a messaging app. It saw data, users, and the chance to strengthen its dominance in the online advertising space—worth hundreds of billions of dollars globally.
If you’re a business owner, this story holds a powerful lesson: positioning your company for a strategic acquisition can yield a far higher sale price than relying on standard valuation methods. Here are five ways to make your business irresistible to strategic buyers.
1. Strengthen Supply Chain Control
Big companies often acquire smaller ones to secure their supply chains. For example, Starbucks purchased Evolution Fresh for $30 million to gain control over a key juice supplier. By integrating suppliers, companies reduce dependency and increase stability.
Takeaway: If your business offers something essential in a larger company’s supply chain, you may be an attractive target.
2. Expand Sales Opportunities
Sometimes acquisitions are about giving sales teams more to sell. AOL’s $315 million acquisition of The Huffington Post is a prime example. HuffPo brought 26 million monthly readers, providing AOL’s ad sales team with valuable new inventory.
Takeaway: If your business opens new sales channels or strengthens an acquirer’s existing offerings, you become far more appealing.
3. Make Established Products More Appealing
Microsoft’s $8.5 billion purchase of Skype—even while Skype was losing money—wasn’t about direct profit. Instead, Microsoft saw Skype as a way to enhance its core products like Windows, Office, and Xbox.
Takeaway: If your company’s offerings can add value or “sex appeal” to a larger company’s flagship product, you’ve got strategic leverage.
4. Enable Geographic Expansion
Herman Miller’s acquisition of China’s POSH Office Systems for $50 million gave the company immediate entry into one of the fastest-growing markets for office furniture.
Takeaway: If your business has a strong foothold in a geographic region, you may be a shortcut for a larger player’s expansion plans.
5. Acquire Talent and Expertise
Sometimes the real prize isn’t the product—it’s the people. Facebook’s acquisition of start-up Hot Potato for $10 million was largely motivated by access to its skilled developers.
Takeaway: Building a talented team with unique expertise can be just as valuable to buyers as your revenue streams.
Why This Matters for Your Business
Most acquisitions are calculated on future profits, but strategic acquisitions are fueled by synergy. If you can position your business to deliver unique strategic value, buyers may pay a premium well beyond standard valuation multiples.
Want to know what your business is worth—and how to maximize its appeal to both financial and strategic buyers? Take the Value Builder Score assessment today. You’ll receive a 27-page custom report that highlights the eight key drivers of company value and actionable insights to increase your score.