Off-market approaches: How should you respond?
As corporate acquirors become more sophisticated in their origination efforts, many business owners will encounter at least one unsolicited approach from a potential buyer. When that moment arrives, what do you need to consider and how should you respond?
First Reactions: What to Consider
Buyers might approach you for various reasons: positive strategic fit, market expansion opportunity, new product offerings, or simply to reduce competition. Regardless of the motive, a well-informed and strategic response is crucial.
Receiving interest in your business can be both flattering and unsettling. It signals that someone sees value in your hard work and what you’ve created, but it may also prompt deep reflection on your future goals and priorities:
Does this align with your personal and professional goals? Is an exit what you really want? Selling isn’t easy or quick. It requires time, focus, and often impacts your family, team, and legacy.
Is the buyer legitimate? Some parties may simply be exploring the market or gathering competitive intelligence. Consider:
Do they have the financial means to complete a deal?
Have they completed acquisitions before?
Who exactly is behind the approach?
Are they the right buyer? Consider their likely plans post-acquisition. Will your team stay? Will your brand remain intact? How much do their intentions matter to you?
Given all of the above, it’s clear that expert guidance is essential, even if you’re a serial entrepreneur.
Helping you to Understand, Manage and Take Control of the Process
Having the right corporate finance advisor alongside you will help you to answer the questions above.
Assuming the buyer is credible and their goals align with yours, your corporate finance advisor will then provide you with the guidance, support and expertise required to ensure that the process runs at the right pace, protects your interests, and allows you to remain focused on running your business.
This will include helping you to understand the following:
How is your business valued? How would other potential buyers value your business differently?
What information will you need to share and when? How do you maintain confidentiality whilst simultaneously enabling a buyer to assess your business?
Are they the only interested party?
Should you explore other offers?
What’s expected of you during and after the sale (some buyers may expect a founder to stay involved for a period of time post-deal)?
· How do you balance the demands of a sale process with the successful running of your business?
In addition, your corporate finance advisor will be able to recommend lawyers (for legal documentation) and accountants (for tax and financial structuring) that are both experienced in the type of transaction that is envisaged and appropriate for the size of your business.
By helping you to successfully navigate the challenges a sale process can present, you’ll be able to achieved the best possible outcome, aligned with your goals.
A Real World Example – by Richard O’Donnell, Founding Partner of Pura Advisory
“Helping founders to achieve exceptional outcomes is in the very DNA that runs through us all at Pura Advisory. This was achieved in abundance in a transaction I worked on in 2024, just before founding Pura Advisory.”
“A well-established family business had received an approach from a global trade buyer. Whilst the family identified a strong sense of cultural fit with the potential acquiror and believed they could be good custodians of the business they had built, they felt underwhelmed by the valuation set out in the original approach.”
“By guiding the founders through the response and management of that approach, preparing “buyer ready” information and simultaneously introducing two other global trade buyers, the family were able to take control of the sale process, benefit from competitive tension and satisfy themselves that they were selling their business at the right valuation.”
“Through this advice, guidance and assistance, the family subsequently signed and completed the transaction with the original party that had approached, but at a 90% increase in the valuation of their business.”
How Pura Advisory Can Help
As an entrepreneur, you’re well-versed in successfully growing your business, but selling it is a unique experience.
Having completed over 100 successful transactions over a 20-year period, the Founding Partners of Pura Advisory will guide you through your sale process. With a truly hands-on approach, we will support you every step of the way and put you firmly in control of achieving the best outcome.
To learn more about how we can help you, speak to us today.