Take Share to Gain Value

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Take Share to Gain Value: Why Growth Is the Key to Your Dream Exit

Middle-market companies often outperform their larger, publicly traded counterparts in agility and customer responsiveness. Yet in today’s economic climate—shaped by persistent interest rates, inflationary pressure, global uncertainty, and capital constraints—mergers and acquisitions (M&A) valuations remain under pressure.

The antidote? Differentiated, profitable growth.

For business owners aiming to exit at a premium valuation, simply maintaining the status quo won’t cut it. In 2025, as in recent years, buyers want to see businesses that not only weather turbulence—but outpace their competition while doing it. That means creating separation through strategy, execution, and a relentless focus on winning market share.

The Current M&A Climate: A Buyer’s Market, Unless You’re an Outlier

Over the past few years, many middle-market firms have either:

• Recovered from the COVID-era supply chain chaos, or
• Come down from the “COVID bump” in revenues caused by temporary spikes in demand.
  

Now, most are experiencing normalization—but in a slower, more complex market. Organic growth is harder, capital is more expensive, and buyers are pickier.

To stand out and command a premium valuation, companies must go on offense—not just to survive, but to gain share.

Exit velocity” is the intersection of sustained revenue growth and improved earnings in the final years leading up to a liquidity event.

The 3 Types of Leaders in a Challenging Economy

In today’s uncertain climate, we consistently see three types of CEOs emerge:

1. Survivors

They cling to pre-pandemic playbooks and hope for a market rebound. These businesses remain stagnant and typically lose ground over time.

2. Reactors

They respond to changing conditions—but inconsistently. Strategic pivots are often reactive, fragmented, or misaligned with core competencies.

3. Accelerators

They intentionally create disruption—expanding service lines, enhancing value propositions, and attracting new, high-value customers. These leaders take share, increase enterprise value, and position for strong exits.

Ask yourself: Are you waiting for the market to stabilize, or are you building a business that thrives regardless of the environment?

Who Will You Be in Your Market Segment?

Now is the time to define your posture:

• Market Leader – Driving innovation and seizing share.
• Market Neutral – Treading water.
• Market Laggard – Losing relevance and reacting late.

Buyers will assess your trajectory and place a premium on leadership mindset. Demonstrating a plan to grow—and executing it—is a key indicator of management strength and future scalability.

Six Steps to Take Share and Accelerate in 2025

Here are practical, high-impact ways to prepare your company for a strategic sale or recapitalization:

Step 1: Audit Your Position

Evaluate your company’s current market stance:

• What’s working?
• What’s dead weight?
• What needs innovation? Be brutally honest. Reallocate time, money, and talent away from non-ROI activities toward high-conviction growth bets.

Step 2: Analyze the Competition

Use a SWOT framework to assess your competitors:

• Are they retrenching or expanding?
• Have they stopped innovating or lost key accounts? Leverage insights from customers, vendors, and sales teams to identify weak spots—and move decisively into those gaps.

Step 3: Innovate Around Customer Needs

Don’t bet the farm—but do experiment. Launch lightweight MVPs (Minimum Viable Products) and gather fast feedback.

• What is your competition missing?
• What do your best customers wish you offered? Balance expansion between existing client upsell and new customer acquisition.

Step 4: Explore Inorganic Growth

Distressed companies, under-managed brands, and divestitures from larger players may offer growth at a discount. Use strategic M&A as a buy vs. build option to enter new markets, add capabilities, or compress timelines.

Keyword boost: “strategic acquisition planning,” “distressed asset M&A,” “private equity roll-up strategy”

Step 5: Communicate Your Intent

Clearly define your strategic objectives—internally and externally:

• What “hill” is your team taking?
• How does that align with what your market needs now? Customers need to hear your message consistently to engage and adopt your expanded offerings.

Step 6: Track and Prove Results

Create dashboards around revenue growth, customer retention, margin expansion, and win rates. A clear and upward performance trajectory can be worth millions in valuation when presenting to investors or acquirers.

Businesses showing consistent 10%+ CAGR (Compound Annual Growth Rate) are far more attractive to private equity firms and strategic buyers.

Recession or Reset? You Decide.

Many CEOs are still in recovery mode, waiting for conditions to improve. But those with a proactive, accelerator mindset are seizing market share while others hesitate—and they’re the ones most likely to achieve a liquidity event.

Buyers are asking:

“What’s your plan to grow, and how are you executing against it?”

Answering that question with conviction and evidence is key to achieving your dream business exit in 2025 and beyond.

Talk to the Experts at Merit Investment Bank!

J. Craig Dickens 
Chairman
Craig.Dickens@MeritInvestmentBank.com
253-370-8893

Securities offered through Finalis Securities LLC Member FINRA/SIPC. Merit Investment Bank and Finalis Securities LLC are separate, unaffiliated entities.