So, someone has approached you to buy your business. It is unexpected and out of the blue. What should you do? In Step 1, I suggested you meet the acquirer and decide whether his vision suits you and whether you like and can trust him.
If the company is a listed company, rest assured the deal will be difficult as you will be turned inside out and upside down.
If you have a good feeling from the initial meeting, and the acquirer asks you for another meeting, do not set this any sooner than two or three weeks ahead.
If, after the initial meeting, the vision of the acquirer excites you, now is the time to start the “sales process”. After all, you probably (definitely?) want to get the best price and the best terms for yourself and other stakeholders. Sitting back and waiting for it to happen won’t get you there.
Step 2 – Appoint a Mergers & Acquisition Advisor
- Ask your accountant or trusted advisor to recommend a Mergers and Acquisition Advisor – warning, accountants are not generally good salesmen nor good judges of the market value of a company.
- This is likely to be the most important advisor you will appoint. He/she should have good sector knowledge as well as understanding your type of business plus have a track record of dealing with your size of company. He/she will help you:
- evaluate the acquirer and properly understand their reasons for considering acquiring your business
- judge the worth of your business to the acquirer and also to a wider market of acquirers
- position the strengths and benefits of your business in the mind of the acquirer to your best advantage
- review the information, both financial and no-financial, that will be needed to give to an acquirer if you decide to continue discussions
- agree the agenda for each meeting with the acquirer, coach you on what to say and how to make your pitch
- review and check all the historic and forecast financial and non-financial information you will provide to the acquirer
- by chairing every meeting between you and the acquirer
More to follow next time. Please feel free to get in touch with me at firstname.lastname@example.org or on 07904 766230, or for more information, please check out my websites at www.klopartners.co.uk and www.peterkroeger.com