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Auctions & Bidding: 4 Tips for Sell-Side M&A Success


Selling your business via a merger or an acquisition is usually pretty exciting, although it is fairly overwhelming as well. Of course, getting to the point where the deal is actually set in motion can take quite some time. And, plenty of deals have imploded before they have really begun, some fall apart just before closing time, and they can obviously get derailed at any point in between. But, there are steps companies can take prior to gauging prospective buyers’ interest and certainly before entering into negotiations to avoid certain issues. Here are four tips for sellers to ensure M&A success:

Put Together a Strong Team

Having the right team in place has an enormous effect on how a deal unfolds. It is understandably tempting to try to cut corners for the sake of a dollar, but as with most things, you end up getting what you pay for. Unfortunately, saving a bit of money in the beginning by trying to do things yourselves or hiring less experienced professionals will most likely lead to spending more money in the long run, as even the most minor of mistakes can accumulate and become quite costly to correct. To set the deal up for success, it is imperative to put together a strong team of seasoned M&A experts. You need to have people who know what to expect, can anticipate potential issues, and have experience dealing with the type of problem solving inherent in the sale of a business.

Set up a Data Room

Data will drive every aspect of a sale, so having information gathered, analyzed, and accessible will be critical to moving things along. One of the most important steps a company can take to ensure proper data management and organization is establish a virtual data room. This should really occur months to years ahead of time, meaning before the sale of the business is even on the horizon. Of course, this will only be useful if there is a coherent data management strategy in place, and maintaining the company’s records and files must be an ongoing process.

Be Ready for Anything

The companies who fare well in M&A do their research beforehand, have a concrete plan and strategy outlined in advance, and allocate the appropriate resources and staff to make adjustments as needed. There is so much competition these days and with technology allowing for things to occur in an instant, companies have to be on their toes at all times ready to act at a moment’s notice. Flexibility and agility are vital to getting the job done, and a company that is unable to accommodate an interested buyer’s demands may lose out to one that can.

Offer Incentives and Minimize Obstacles

Price and motivation will certainly influence the level of buyer interest, but there are always other ways to make a deal seem more enticing. If a company’s appeal is lacking a bit in certain aspects, one way to spice things up is by offering special incentives and ensuring that some of the usual obstacles are minimized. For example, if stockholder voting will be required to solidify a closing, this can be done early on to show that there is one less hurdle to jump. In addition, throwing in unusual investment terms or bonuses if certain parameters are met can help set the deal apart and garner more interest. Getting the sale often boils down to creativity and a clear willingness to work with the other side.

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