Your company is attracting attention. What should you do when faced with an acquisition offer?
Another party has shown interest in your company and wants to enter into discussions about a potential acquisition. M&A specialist Wouter Jolie guides you through the process: “Explore whether there are other potential buyers and make sure you have the right information.”
Interest from an Unexpected Corner
It can happen just like that — someone shows serious interest in your company. First, determine whether the offer aligns with your goals and whether the timing is right, advises M&A specialist Wouter Jolie. “If that’s the case, you can start preparing for the potential sale of your company.”
Explore Multiple Buyers
What do the first steps look like? According to Wouter, it begins with exploring whether there may be other interested parties. “Different types of buyers vary considerably, particularly in terms of the purchase price and the conditions they impose. It may therefore be wise to approach a foreign party, a private equity firm, and a strategic buyer, for example.”
By engaging multiple potential buyers, you’re more likely to make a well-informed decision. With whom do you have the best connection? Who best fits your company? What’s the difference between a private equity party and a strategic buyer? Be sure you have these insights before committing to a particular buyer.
This also creates healthy competition. Acquisition candidates are often willing to go the extra mile when they know there are others at the table. In turn, this can help drive up the value of your business.
Information Memorandum
The chances of receiving a serious, high-quality bid increase significantly when you proactively gather the necessary information and compile it into a clear information memorandum. This always includes several key elements, such as details about your activities, main customers and suppliers, organization, and real estate. It also includes financial information, such as your balance sheet, profit and loss statement, and a forecast of expected revenues.
Due Diligence Investigation
A well-prepared information memorandum makes all relevant data transparent from the start, Wouter explains. “At some point, a potential buyer will want to dive into your numbers. By preparing thoroughly and clearly showcasing your company’s strengths, you reduce the risk of surprises during the due diligence process that could lead the buyer to adjust their offer downward.”
Advice from an Experienced Party
Wouter also recommends seeking guidance from an experienced advisor. “A good external advisor knows how to present and position your company in the best possible way, but can also help remove emotional factors from the process—especially during negotiations. At Rembrandt, we support over fifty business transfers each year. That means we know exactly how the sales process works and where we can create the most value for entrepreneurs.”
Exit-readiness
Are you open to an unexpected acquisition offer? Then prepare well and organize your information. This way, you increase the chances of achieving the best possible price and other conditions. You can find this preparation, along with other important steps during an acquisition process, in our Sales Readiness Checklist.
Prefer to get in touch directly? Wouter Jolie is happy to assist you.