Getting Multiple Buyers Interested

A competitive process that involves multiple buyers is a critical component of a successful M&A process

One buyer is not enough

  • During an M&A process, it is extremely important to generate interest from multiple parties in order to induce competition among buyers. Too often sellers go down the M&A path with only one buyer, which a) eliminates competition that could increase the value of the business and b) exposes the seller to significant risk if the buyer does not have the financial wherewithal to complete the transaction.
  • Running a complete M&A process, soliciting a large, yet targeted universe of potential acquirers, and hand picking the best candidates is the only way to achieve maximum value for your business.
  • Timing is an important function of the process that keeps buyers not only interested, but excited to do a deal. A professional adviser can set an M&A timetable that allows the maximum competition among buyers while at the same time maintaining the impetus to close the deal.

Running a structured process is critical in determining who the interested buyers are

Conducting a competitive M&A process

When undergoing a formal M&A process, it is important to execute a structured process that targets a wide audience of potential buyers and fosters a competitive bidding environment. Set forth below is a typical timeline of a professionally structured M&A process:

Event Number of Parties Approximate Timing
Marketing Teaser Sent 500 2 – 3 weeks
Buyer Interest Expressed 75 1 – 2 weeks
Interview on Phone/In Person 50 2 – 3 weeks
Confidentiality Agreement Signed 40 1 – 2 weeks
Offering Memorandum Sent 40 1 – 2 weeks
Non-Binding Indication of Interest 10 2 – 3 weeks
Meeting with Management/Tour of Premises 5 1 – 2 weeks
Due Diligence Period 5 1 – 2 weeks
Draft Sale Agreement 4 1 – 2 weeks
Negotiate Transaction 3 1 – 2 weeks
Closing 1 1 – 2 weeks

Sunbelt’s representatives have significant expertise in running a competitive M&A process

  • We have experience in running successful M&A processes that generate interest and a competitive bidding environment in order to ensure our clients realize maximum value for their company.