The Real Value of Branding in Mergers & Acquisitions

In private equity, the conversation often starts-and ends-with hard numbers. Revenue growth, EBITDA margins, operational efficiencies: these are the levers PE firms know best. But in the rush to quantify, one subject is too often left out of the value creation playbook: Branding.

The Forgotten Multiplier

Branding is frequently dismissed as “too subjective” or “intangible” to be a serious value driver in M&A. Yet both case studies and market performance suggest otherwise. Strong brands command customer loyalty, support premium pricing, and help companies weather market volatility. In some of the most successful deals, brand equity has been the silent force behind outsized returns and premium exit multiples.

Is Branding Really More Subjective Than Financial Forecasts?

Let’s challenge a few common assumptions:

• Aren’t all projections based on assumptions?
  Financial forecasts rely on predictions about future sales, trends, and market conditions-just like brand valuations. The difference? Brand analysis often incorporates deeper insights into customer behavior and loyalty, which can be a stronger predictor of future performance.
• Is operational performance really more reliable?
  Operational KPIs can shift quickly with market changes or leadership transitions. A trusted brand, on the other hand, can sustain margins and customer retention over the long term.
• Can brand value disappear overnight?
  Certainly-just as contracts can be lost or revenue can dry up. The key is not to ignore the asset, but to evaluate and manage it with the same rigor applied to other value drivers.

The Case for Brand in PE Value Creation

Branding goes beyond logos and ad campaigns. It’s the sum of how customers, partners, and employees perceive a company-and it can be a powerful lever for growth, especially in crowded or commoditized markets. Deals like Unilever’s acquisition of Dollar Shave Club or Shiseido’s purchase of Drunk Elephant demonstrate how a bold, well-articulated brand narrative can command a premium.

A Balanced Approach

As a transformative technology company, we believe in the value of both tangible and intangible assets. Overlooking branding in M&A is a missed opportunity-especially when brand equity can serve as a leading indicator of future growth, resilience, and value at exit.

The Takeaway

Branding may be an “often forgotten subject” in PE, but it’s time to bring it back into focus. The next premium exit might not come solely from operational excellence, but from the story your brand tells-and the loyalty it inspires.