You already have a serious buyer. So why pay someone to find one? You may not need to. Finding buyers is only part of the issue. The more useful question is: Do you know enough about the buyer and your alternatives before you commit to the buyer already at the table?
A Buyer and a Market Are Not the Same Thing
A real buyer gives you something valuable: an actual opportunity to evaluate. What it does not necessarily give you is a market reference point. You may know what this buyer is willing to offer, but not how another qualified buyer might value the company, structure the transaction, or view the opportunity.
One way to get additional information is through a competitive sale process. That doesn’t have to mean approaching dozens of potential buyers. It could be limited to a small group of logical buyers.
But not every owner with an interested buyer needs to test the broader market. Sometimes a negotiated sale with one buyer makes sense. The buyer may be a particularly strong strategic fit. The universe of credible alternatives may be small. Or the proposal may combine attractive economics and structure with a buyer you believe is highly likely to close. So the question isn’t whether every owner should create competition. It’s: Would information about another credible alternative materially change your decision or negotiating position?
Know What You Need to Know Before Your Options Narrow
Timing matters because your ability to answer that question can change as the transaction progresses.
A letter of intent may include exclusivity—a period during which your ability to pursue or negotiate with other buyers is restricted.
Before exclusivity, another credible buyer could provide additional information, an alternative, or negotiating leverage. After exclusivity begins, some of that optionality may temporarily disappear.
That doesn’t make exclusivity inappropriate or the current buyer a bad choice. It means you should decide whether additional market information would matter before you give up the ability to pursue it. The question isn’t whether one buyer can be enough. It’s whether you know enough before you give up the ability to find out.
Testing the Market and Getting Representation Are Two Different Decisions
You could decide not to run a competitive sale process and still decide you need experienced transaction representation.
If you move forward with the buyer you already have, important terms still need to be evaluated and negotiated, and the right specialists need to be involved at the right time—all while you continue running the company.
Conversely, deciding that additional market information could be valuable doesn’t automatically determine what type of intermediary or process is right for you.
These are separate decisions: whether you know enough to become more committed to this buyer, and whether you have the right experienced transaction team around you if you do. The answers do not have to point in the same direction.
A Buyer Decision Review
After a focused 20- to 25-minute conversation using the information you already have, our team can begin a Buyer Decision Review.
We’ll help organize what is known about the buyer and proposal, identify where additional market information or alternatives could materially affect your decision, and identify where you may need additional transaction expertise before moving forward.
If you haven’t determined whether the opportunity could support your financial goals, we can incorporate that analysis into the same review by comparing estimated after-tax resources with what your financial plan needs from the sale.
Where investment banking, M&A, legal, valuation, or tax expertise is required, we’ll identify the question to take to the appropriate professional rather than replace their role.
You don’t need to know whether you need an investment banker—or have every transaction detail figured out—before we talk.
If you could benefit from a conversation with our advisory team, we would be happy to provide a complimentary consultation.
Important Disclosure: Investment advisory services are provided by Beacon Pointe Advisors, LLC, an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. This article is for informational purposes only and is not individualized investment, legal, or tax advice. Beacon Pointe does not provide legal or tax services. Consult your legal and tax advisers regarding your circumstances.