As a business owner, receiving unsolicited offers to acquire your business can be flattering and hard to turn down. There is the allure of a quick transaction, money in the bank, and eliminating the stress of managing the business; however, it rarely works out well.

The Risks of the Unsolicited Offer:

1. You’re Only Getting One Viewpoint on Value: An unsolicited offer provides just one viewpoint of your business’s worth. Other buyers are probably ready to pay a premium for your assets, but you just haven’t connected with them yet.
2. “One Buyer is No Buyer”: This common real estate saying applies here too. You’re more likely to reach your desired market price with multiple buyers at the table. If you only have one buyer, you’re quickly left with none if the deal falls apart.
3. A Single Buyer Can Exploit the Lack of Competition: When you’re negotiating with just one buyer, they have all the power. Eventually, the solo buyer will figure out they’re the only party at the table and may capitalize on the lack of competition, leading to a lower price and less favorable deal terms.
4. Time Constraints and Offer Reduction: Without competition, a single buyer can extend the timeline to their advantage, often leading to lower offers during lengthy negotiations. With multiple buyers, you can set the terms and achieve your goals in a shorter, more strategic closing timeline.

The Power of a Structured Auction Process

Through a well-organized, competitive auction process, you can reach those potential buyers who value your business as much as you do. Engaging a trusted M&A advisor, like ACT Capital Advisors, opens doors to broader market opportunities, ensuring you don’t leave money on the table.

Success Speaks for Itself: A Case Study

Consider this real-life scenario: A business initially entertained an unsolicited offer of $5.2 million, equating to 2.5x EBITDA. With ACT Capital’s guidance, the owner uncovered significant additional interest, resulting in a final sale at $19.3 million, or 8.3x EBITDA—all within a strategic six-month timeframe.

Your Partner in Maximizing Value

 Before you accept that unsolicited offer, reach out to us and discover the value and peace of mind that comes with a strategic, well-managed sales process. We’re here to help you achieve the outcome you deserve.

About ACT Capital Advisors  

ACT Capital Advisors is a premier mergers & acquisitions firm representing lower to middle-market companies across all industries. ACT has a 40-year history of deal-making, closing 250+ transactions, and unlocking over $2.5 billion in wealth for its clients. For more information, visit https://actcapitaladvisors.com/.