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.
In Step 2, I suggested it is time to get close to appoint an experienced Mergers and Acquisitions Adviser who knows your market and your business.
In Step 3, I suggested you decide what you want to do and what you want to get out of it.
In Step 4, I suggested you took the time out to prepare all the information you will need to sell your company and provide the necessary information for an acquirer to value it.
Now we are getting down to the nitty gritty. This is the real start of the sale process. Until now, you have been involved in a “phantom war” and have set about preparing your strategy to attack and also shoring up your defences.
Step 5 – Develop trust between you and the acquirer
- The acquirer is not in a position to realistically value your business; after all you have not made your pitch yet. The acquirer has very little real information on which to place a value.
- At this point your M&A Advisor will take the lead. He will ask the acquirer what they need to know in order to confirm their interest in your business and what financial and non-financial information they will need in order to value the business and make an offer.
- This is the process I call Discovery.
- You will be asked a lot of questions and the acquirer will ask to meet your key staff, customers and suppliers. Rarely is that appropriate at this point, though senior management may well need to be involved.
- Do everything through the Advisor; he/she can never make commitments on your behalf but can and will protect your goodwill with the acquirer.
- Be closed with competitors and open with those that are not.
- Spend time with the acquirer; sell yourself, talk about your wishes and the desires and dreams you have for yourself and your business and ask the same questions of the acquirer.
- At some point the Advisor will start the deal negotiation. By that stage you will know whether you are prepared to entrust your future and your business to the acquirer.
- Once an offer is received ….. well that is another whole subject altogether.