Page 8 - NBIZ December 2023

What Should You Do with All Those

Unsolicited Offers to

Buy Your Business?

By Patrick Ungashick

f you are a business owner, you probably receive a is not careful in how he/she responds to these offers, one
regular flow of emails and phone calls seemingly could harm his/her company by potentially sharing sensitive
offering to buy your company. Private equity (PE) information with a competitor or sparking rumors that the
Ifirms and strategic buyers are sitting on record company is on the market. So, what steps should one take
amounts of cash and must make acquisitions to hit their when he/she receives an unsolicited offer?
business objectives. Everyone is waiting for the flood of
baby-boomer business owners selling their companies, Part 1 of this series covers the first steps one should take
but it never seems to come. As a result, there is too much upon receiving an unsolicited inquiry. Part 2 will explore
money chasing too few acquisition opportunities. While how to proceed if you have had an initial conversation and
this is generally a good thing for business owners, a wish to continue. Part 3 addresses what advisors a business
stream of unsolicited offers or inquiries can grow into an owner needs if he/she decides to potentially pursue a sale in
unwelcome time sink if not handled correctly. Also, if one the near term.
Step 1: Determine whom the inquiry really is from. To
evaluate if an inquiry is legitimate, one must know who
sent it. Sometimes, the sender will fully disclose their iden-
tity, but in other situations the sender may
be intentionally vague. If it’s not imme-
diately clear who the sender is, look
for the key phrases below to match
wording with the type of buyer.
• “I am working with several
buyers…” This wording reveals that
the sender works as a broker at an
investment bank, boutique M&A firm,
or business brokerage firm.
• “I represent a firm looking to make ac-
quisitions in your industry…” This phrasing
indicates that the sender is either a broker, as
above, or an independent search agent for private
equity firms.
• “We are a well-funded buyer with a history of
interest (or past acquisitions) in your industry…”
This language indicates that the inquiry is
coming directly from a PE firm.
• “My employer, Acme Corporation is ...” This is a
strategic buyer, most likely in the same industry.

8 NBIZ ■ December 2023