Benchmark International

Getting ready to meet potential buyers can be a daunting task. The purpose is for you and the buyer to understand each other's businesses and explore potential fits, and it’s normally better that valuation discussions are held separately.

Here are some important considerations for that initial meeting.

We Won’t Normally Consider Offers Without an Initial Meeting

Offers that come out of the blue, without a prior meeting and fact-finding exercise, can sometimes raise scepticism.

Before considering any offers seriously, your deal team will normally insist you have an initial meeting with the buyer. It is also essential for relationship building and laying the groundwork for negotiations. Always be prepared to showcase your business and its prospects during this crucial stage. The process of preparing the Information Memorandum (IM) will have helped to some degree, but it's crucial to remember that the negotiation starts here.

We Understand the First Buyer Meeting Can Be Daunting

A seasoned buyer will always want you to feel at ease.

Different clients may be nervous about different aspects. Some may dislike dealing with numbers, while others may struggle to understand the technical details. At the end of the day, remember it's just another business meeting.

The IM, of course, will form the basis of much of the discussion, so refamiliarising yourself with this will be worthwhile. Consider creating a PowerPoint presentation, even if you don't use it, as the process of preparing a presentation itself can be a great foundation for the initial meeting. Your deal team will be happy to work through this with you.

Watching a few archived BBC Dragon’s Den episodes is always a top tip. These 'dragons’, as highly successful investors, are very good at asking the right questions.

Consider the meeting location wisely. Onsite will clearly give the buyer the best flavour for the business, but if confidentiality concerns are high, consider meeting offsite, perhaps at a local hotel, and keep up-your-sleeve the option of inviting the buyer for an out-of-hours tour of the business.

Bringing product brochures and demo products to the initial meeting can make a significant impact.

Get the Buyer Talking First

It's always a good idea to ask the buyer to kick-off the discussion.

The buyer asked to meet you, after all, and whilst they are talking, you’ll be able to make an informed decision as to how much you are actually prepared to divulge.

Consider the list provided for the topics a buyer will likely discuss.

Make decisions on what information you're prepared to share and what needs more cautious consideration. Have a careful think about what you want to know about them – ownership, aspirations, people, business, previous deals, and how they fund deals.

Be Cautious About Confidential Information

Trust your instincts when deciding what to disclose.

Whilst the NDA is in place, caution is still warranted. Avoid prematurely disclosing confidential information, customer names, trade secrets, and strategic plans.

Protect your asset.

Refer Offer or Valuation Points to Your Deal Team

Do not allow the buyer to draw you into discussions about your expectations.

The first rule of negotiating is never to make the first offer, which is why we market companies on a bids-invited basis.

If needs be, remind the buyer that this is just an initial meeting, and no valuation talk should occur as all offers should go through your deal team.

Be wary of any conversation about cutting out your advisers from the process. In many cases, this may be a tactic. Buyers are aware that you'll receive the best advice from your deal team and may attempt to circumvent this. Your trusted advisers are your best source of guidance.

Keep Your Deal Team Fully in the Loop

Communication is key throughout this process.

Your deal team will contact you and the buyer for feedback. It's important to express how you felt during the meeting, as the choice is not always about the highest offer. Let your deal team handle the information, offers, negotiations, and more. They are here to guide you through this intricate process.

The initial meeting with potential buyers is a crucial step during the journey of selling your company. With a well-prepared approach and the support of your experienced deal team, you can navigate this process successfully and make a lasting impression.

Author
Chris Donoghue
Senior Analyst
Benchmark International
T: +44 (0) 161 359 4400
E: donoghue@benchmarkintl.com

Europe: Michael Lawrie at +44 (0) 161 359 4400 / Lawrie@BenchmarkIntl.com

Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com

Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com 


ABOUT BENCHMARK INTERNATIONAL:

Benchmark International is a global M&A firm that provides business owners with creative, value-maximizing solutions for growing and exiting their businesses. Benchmark International has handled over $10 billion in transaction value across various industries from offices across the world. With decades of M&A experience, Benchmark International’s transaction teams have assisted business owners with achieving their objectives and ensuring the continued growth of their businesses. The firm has also been named the Investment Banking Firm of the Year by The M&A Advisor and the Global M&A Network as well as the #1 Sell-side Exclusive M&A Advisor in the World by Pitchbook’s Global League Tables.