After reviewing many potential targets, signing the confidentiality agreements and reading the offering memorandums, it is finally time to have a sit down with the seller. Much like a job interview, first impressions are incredibly meaningful relative to your chances for success. Establishing a personal relationship with the seller and gaining his/her the mutual respect is key to increasing the odds of deal success. The bond will help to clear the many deal hurdles along the way.
Before the meeting, make sure you have your elevator pitch together. Why are you/your company a good fit to be the next owner of this business? Do you have any thoughts around synergies and integration that you want to share? How will you finance the deal? Additionally, having a company overview presentation ready will show your sincere interest in educating the seller.
Deal experience should also be addressed. If this is your first deal, make sure you have experienced advisors identified. For experienced deal makers, be prepared to explain whether your transactions met expectations and how the teams and operations were integrated.
Finally, after you have built the relationship and addressed the fit, it is time to move into your questions. As part of your preparation, think about the areas of greatest importance to you. Subject areas may include: competition, finance, human resources, legal, marketing, operations, sales and technology. Think about industry specific questions that are going to be relevant to any deal.
Besides pointed questions, also ask some open-ended questions. What areas of the business could use the most improvement at this time? How has the industry changed over time? Is there any low hanging fruit in terms of opportunities for the next owner? What keeps you up at night?
Before leaving the meeting, try to get comfortable with the seller’s motivation for an exit. Unfortunately, many sellers are simply opportunistic and are hoping for an unreasonable multiple. If possible, see if the seller will share their thoughts around pricing, structure and timing.
The first buyer seller meeting is your chance to build critical deal momentum. To best leverage the meeting, be as prepared as possible and stay sensitive to the seller’s situation. This will put you in the driver’s seat versus the competition going forward.
About Sun Acquisitions
Sun Acquisitions is a Chicago based M&A firm specializing in helping businesses confidentially buy and sell privately held firms. Our team is comprised of certified business intermediaries with deep transactional knowledge and experience across a broad range of industries. Our Advisors have experience working on hundreds of transactions for small and middle market transactions.
Let our team of Advisors and former Corporate Development Professionals help drive your business to the next level. Contact Sun Acquisitions for a free consultation at firstname.lastname@example.org.