Gareth Smyth, CEO of M&A advisory and business finance firm Hilton Smythe, weighs up the pros and cons:
“For business owners who have built successful digital, marketing or communications agencies, the question of exit strategy inevitably arises.
While selling often dominates the conversation, there’s another route that deserves serious consideration: taking your business public through an initial public offering (IPO).
Even for agencies valued at less than £20 million, an IPO can be a viable option with the right preparation and professional advice. The key question is: should you take your company public or sell to a strategic acquirer?
In order to make this decision you should speak to a trusted M&A adviser and speak to them about conducting an honest assessment of your agency. Before pursuing either path, you need to conduct a rigorous review of where your company stands. Governance structures, financial systems and operational processes will come under intense scrutiny. If you can’t provide audited accounts or demonstrate strong internal controls, you’re likely not ready for either route.
Equally important is whether your agency management team possesses the necessary skills. Running a public company is different from leading a private one. You’ll need investor relations expertise, regulatory awareness and the resilience to navigate quarterly earnings pressures. If that prospect fills you with dread, an acquisition may be the more suitable option.
READ MORE: Agency sets ambitious growth targets after signing up almost two new clients a month in H1 2025
Your market position should also be a key factor. If you’re in a sector with significant untapped potential and a clear path to scale, public markets can offer patient capital and strategic flexibility. But if you’re operating in a mature or consolidating market, partnering with a strategic acquirer may unlock greater value. Consider your revenue model as well. Subscription-based businesses with predictable income are generally well-received in public markets. In contrast, if your revenues are cyclical or project-based, an acquisition could deliver a better outcome.
A good M&A advisory and business finance firm will take you step-by-step through the process as understanding what you’re really choosing is crucial. A public listing offers compelling advantages: ongoing access to capital without immediate loss of control, enhanced market credibility that opens doors to customers and talent and strategic independence. However, public life brings its own demands: quarterly reporting, regulatory compliance, constant investor engagement and media scrutiny. If you prioritise privacy and operational freedom, this route may not be for you.
By contrast, selling provides immediate liquidity and certainty. Strategic acquirers can offer access to established distribution channels, technology platforms and operational expertise – resources that might otherwise take years to develop internally.
Market conditions play a pivotal role in both scenarios. Public market appetite can fluctuate sharply with investor sentiment and macroeconomic shifts. Acquisition markets operate differently as strategic buyers often remain active even when private equity interest wanes.
Ultimately, this decision should serve long-term value creation, not just short-term optimisation. Companies with strong competitive moats may unlock greater value by remaining independent. Those facing consolidation pressures or seeking rapid scale may benefit more from a strategic sale.
To help you make this decision you should seek expert, clear, honest guidance from business advisers with deep-rooted industry knowledge.
Perfect timing is rare in business. The best decision positions your company for sustainable success – not just immediate gains. Whether you pursue the public markets or an acquisition, ensure the path aligns with your company’s strengths and your long-term vision.
The choice you make will shape your agency’s legacy for years to come. Make it deliberately, with clarity, preparation and confidence in your ability to execute.”
