Navigating an Unsolicited Offer for Your Company

Private equity firms and strategic buyers invest considerable time and resources developing relationships with business owners and will often submit proposals to buy businesses directly from owners outside of formal transaction processes (i.e., through one-on-one discussions). Sometimes the buyer’s motivations for doing so include the desire to quickly negotiate a more buyer-friendly deal than could be achieved in a competitive, more broadly marketed transaction process.

As a business owner, there are a number of points to consider when evaluating an unsolicited proposal. These include:

In order to assess these factors and more fulsomely evaluate an unsolicited offer, getting advice from an M&A advisor can be crucial. In addition to providing thorough analysis on valuation, alternatives, and overall deal readiness, the M&A advisor will work tirelessly to maximize value and improve the terms of the offer through the following:

1. COMPETITIVE TENSION

   Presence of an M&A advisor demonstrates the owner’s commitment to the sale process and signals to the buyer they are ready for a fully marketed competitive process if a premium value for the business is not achieved

2. NEGOTIATION SKILLS

   M&A advisors have significant market intelligence and experience navigating the complexities of selling a business, making them well equipped to negotiate favourable transaction terms and structures which can significantly increase sale proceeds

3. SUPPORT & RESOURCES

   M&A advisors manage all aspects of the transaction process, including collection and framing of information requests from the purchaser to sustain or improve the offer through due diligence, negotiations and closing, allowing the owner to focus on day-to-day operations of the business