Six Steps After the Approach

Congratulations, you got an offer! So…now what? We’ve found that you need to be very careful about accepting a first offer, especially an unsolicited one, as it can simply be bottom fishing, a buyer looking for a bargain. So what should you do?

With our combined years of experience bringing together hundreds of companies and generating billions in value, we recommend taking the following six steps if you are approached by a potential acquirer, after you thank them and tell them you’re flattered by the interest, of course.

  1. Get an NDA and non-solicitation agreement in place immediately to protect yourself.
  2. Check out your buyer. Are they serious and can they afford to do a deal?
  3. Get a due diligence checklist to see if you’re in a position to do a transaction at all, let alone conducting one while maintaining a day-to-day business.
  4. Create more time for you to consider the offer by asking for an independent valuation.
  5. Plan to extend overtures to other potential acquirers, especially companies you have successfully partnered with in the past.
  6. Generate three-year projections ASAP. Buyers won’t get final approval without it, and most valuations will require one.

It is very important to be aware that 75% of the time, someone will offer more than your first bidder. The steps above will help you leverage your position as much as possible, and bring about the most successful transaction possible.

Posted by , Chairman on 15 January 2014
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