It is not un-common for business owners to receive unsolicited offer to purchase their business. But it is common for majority of those offers to fall apart. Let’s take a look.
So, you as a business owner received an unsolicited offer from either a competitor, one of your vendors, suppliers, PE firm. Exciting news!, not quite. How do you know what the accurate market value is for your business, how will you handle negotiations, buyer questions, due diligence, contract negotiations, all while running your business? And if the business takes a hit, so will the offer price. A lot of time business owners do not have a succession plan in mind and do not know what their business is worth. The offer will likely be low and since the buyer knows that they are the only ones on the table, the leverage is on their side.
We at GillAgency have had numerous conversations with business owners in this situation. While elated to be in this situation, there are a lot of pitfalls. Almost all of the business owners that we have spoken to who have had either 1 or 3 unsolicited offers fell through or the deal changed at the last minute where it didn’t make sense for the business owner to sell.
So, to answer the question, when you get an unsolicited offer to purchase your business you should immediately speak to an M&A expert like ourselves to see what your options are. An M&A advisor can guide and let you know what the valuation is for your company and can help negotiate a better outcome for you. Or better yet, if you have thoughts of selling then going to the marketplace confidentially where you have leverage with multiple options is the best route. Or you can do both.
We at GillAgency will provide no obligation, confidential advice on your unsolicited offer and we will never pressure you in using our advisory services. We are simply here to help. Contact us at https://gillagency.co/contact-us