–SINCE 1982–

Are You Prepared for an Unsolicited Offer?

Despite growing market uncertainties in the backdrop as our nation braces for another presidential election, our firm has seen an increase in business owners receiving unsolicited offers for their business. The changing M&A landscape (especially with technology and now AI) has produced many avenues for these types of offers making it more important than ever for business owners to have a plan in place to evaluate and better understand key aspects in the acquisition process.

1. Know What Drives Business Value

Business values fluctuate similar to the stock market and are subject to outside market forces that can cause the valuation to increase or decrease very quickly. While privately held businesses are not valued like publicly traded companies, each business has key value drivers which are specific to the industry and size of the business. Many times, when a “flattering” unsolicited offer comes in, these value drivers have not been determined and upon further due diligence what looked to be an amazing offer, eventually fades into a mediocre offer at best.

2. Have Your Advisory Team Ready 

Often when owners receive an unsolicited offer, they scramble to put together a team of advisors which forces these decision in haste. Having a solid team picked out and these key relationships established before an offer comes across the table can prove invaluable.   At a minimum, business owners should have an experienced financial planner, a reputable CPA/accounting firm, a vetted transaction attorney, and a focused business intermediary/M&A advisor picked out and ready to go when it’s time to evaluate an offer. Unfortunately, many owners wait too long to assess and pick their advisor team which puts unnecessary strain and uncertainty into an already complicated process.

3. Be Ready to Walk 

While not every unsolicited offer is trying to take advantage of the owner, too frequently these firms are trying to leverage both market and personal circumstances to their advantage. When this becomes more apparent, an unsolicited offer could be the wake up call a business owner needs to understand the importance of being prepared when the time is right. The inherent emotional vulnerabilities in working directly with a buyer (instead of engaging with a experienced M&A firm) should not be ignored. Many times, what seems like the “perfect opportunity” is just a very well-choreographed approach to finding an emotional commitment to help disguise the reality of the unfavorable terms being offered.

“Plans go wrong for lack of advice; many advisers bring success.”
– Proverbs 15:22

Our firm’s goal is to help business owners better prepare and be well equipped for the ownership transition, which is why we offer our Strategic Sellability Plan (SSP) Whether an owner is looking to sell next year or in 10 years, this customized plan works in tandem with the business owners’ key advisors to provide unique insights and help set realistic expectations for when the time comes either with an unsolicited offer or a planned go-to-market strategy.

The majority of our business comes from referrals, and we appreciate your continued trust in our firm.

Robert W. Amerine
President, CBI, M&AMI