What's brewing with agency mergers and acquisitions?

should agency owners consider selling their business? 

What are buyers looking for? 

What’s the M&A market like in 2023?

Today, I’m interviewing Jonathan Baker, Practice Lead for Mergers and Acquisitions at Punctuation (formerly, David C. Baker).  As a business owner (a multi-location brewery) and agency M&A expert, Jonathan knows a thing or two about what it takes to successfully close a deal in this market and in the agency landscape overall.

We discuss:

• The state of agency M&A this year.

• When agency owners should consider selling.

• How agency valuations are formed.

• What buyers are looking for and who’s buying.

• Who should be involved from your team in M&A talks.

Here are some actionable key takeaways for agency founders:

• If you don’t have it in you to grow your business further, perhaps it’s time for M&A.

• Selling your agency can be a growth lever to get access to systems and perks of a larger firm.

• Strong positioning, client focus, and solid processes make you more attractive for M&A.

• A specific expertise can help get you acquired by generalist agencies.

• Don’t share too much too early internally because things can change dramatically.

For founders on the buy side, our guide to programmatic M&A for agencies explains how to build a repeatable acquisition strategy.

🎧 Listen to the episode now: 

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Best,

CQ

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Frequently Asked Questions

When should agency owners actually consider selling, according to Jonathan Baker?

If there's no longer the personal drive or capacity to grow the business further, discussed directly as a signal worth taking seriously rather than continuing to run a business past the point of genuine motivation.

How can selling an agency actually function as a growth lever rather than an exit?

By gaining access to the systems and resources of a larger firm through the sale, an agency owner can continue benefiting from growth, just within a different structure than continuing independently.

What makes an agency more attractive to potential buyers in the current M&A market?

Strong positioning, clear client focus, and solid processes, all factors discussed as directly increasing attractiveness, alongside specific expertise that can appeal even to generalist agencies looking to acquire specialized capability.

Why does Jonathan Baker caution against sharing M&A plans too early internally?

Because deal terms and circumstances can change dramatically throughout the process, premature internal communication risks creating confusion or anxiety based on information that may not hold true by the time a deal is finalized.

Who should be involved from an agency's team during M&A discussions?

A specific, carefully considered group discussed directly in the episode, reflecting Jonathan Baker's expertise on managing M&A conversations without spreading sensitive information too broadly too soon.