President, Silva Capital Solutions, Inc.
To increase profitability and market value, Silva Capital Solutions, Inc. highly recommends ESAC accreditation for every PEO, from start-ups to well-established companies, looking for a growth plan or exit strategy. Here’s why:
Based on our recent study of 18 years of documented mergers and acquisitions, our research proved, without question, that accredited PEOs commanded an optimum market valuation relative to their profitability and overall market demand at the time of sale. Specifically, during this 18-year period, accredited PEOs enjoyed an average market valuation (expressed as a multiple of EBITDA) that was 120-140% higher than the market multiple for non-accredited PEOs!
A PEO’s market multiple is governed by the balance between risk and reward as perceived by the parties involved in the sale. Accredited PEOs have a strong advantage because they provide the prospective acquirer with the assurance of proven third party verification of compliance with important financial, ethical and operational best practices that makes due diligence easier and more trustworthy. This increases the certainty of financial profitability for the acquirer and translates into a competitive advantage for any PEO, large or small, in selling and retaining profitable clients.