Here’s Where You Want to Wow Your Prospective Buyer

Somewhere before a proposal to purchase your business is made, and certainly before a signed LOI, prospective buyers will want to visit your business and meet your senior people. Given you have not signed an LOI, and typically prefer to have proposed LOIs from several parties in your hand before getting serious with any one party, you will likely be hosting several site visits by different prospective buyers.

With respect to communication with your management and employees, we suggest something along the lines of “As we have discussed, as owners, we continually monitor market conditions as well as the needs and interests of our employees, customers, investors, families, as well as our own personal needs. At times, we find it beneficial to explore our strategic alternatives. We just wanted to let you know we have a potential investor in our company visiting on Friday, and we may have more visiting in coming weeks. There is no transaction that is imminent, and you have no reason to be concerned about your job or our company. As always, we are committed to you and our customers and are always looking to do the best for you and them.” Notice it says, “potential investor,” and not “buyer.”

We recommend minimizing the number of employees to which the buyer has access, and usually they should only be senior managers. And we recommend you to be present in any interviews or other interactions.

It is useful, if you have not previously done so in your process, to ask yourself, “What are the things that make this business valuable?” Drawing from that list, look to emphasize those features as you host prospective buyers.

A typical agenda for a visit by a potential buyer might look like this:

Time

Event

Attendees

 1:00 pm

Facility Tour

CEO, Prospective Buyer

2:00 pm

Organizational Overview

CEO, Prospective Buyer

3:00 pm

Financial Overview

CEO, CFO, Prospective Buyer

4:00 pm

Meeting Conclusion

CEO, Prospective Buyer

GROW and SELL Advisors, wholly-owned by Traversi & Co., LLC, is a premier sell-side M&A advisory firm – a boutique investment bank – serving the lower middle market.  Visit us here.

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