When selling your company, having the right deal process is key
A common scenario is a company owner who receives an unsolicited reach out from a potential acquirer expressing a desire to discuss acquisition. Many times, the company owner “sees no harm” in sharing initial confidential company information for the purpose of receiving an offer to acquire their business. But this seemingly harmless step could have you starting an exit on the wrong foot.
Any merger & acquisition professional will tell you there are times when it could be in your best interest to run a process that includes only one potential acquirer, and there are times when it’s not. The general rule of thumb is your best offer is going to come when you run a deal process that includes two more suitors pursuing the acquisition of your business. The reason is simple, when there are two or more vying to own your company, they feel the competitive pressure of a race and will more often put a better offer on the table. When an acquirer knows they are the only option you’re considering, then they may hold back on their offer level because they know they are only competing against themselves.
Deciding what type of dance, or “deal process”, to run should be something you think about well in advance of considering the sale of your business. Each company is a case study of one in terms of what the right answer is. Engage with an exit optimization professional to determine what the best process will be for you and your company to have you on your path to a future euphoric exit event.
