The M&A process can be long and complex. Selling a company requires meticulous planning, experienced professionals, and an appreciation of the deal processes involved in negotiations.
Companies that have not been involved in previous M&A transactions commonly make mistakes that result in under-pricing, unfavourable terms or a failure to complete – which could have otherwise been avoided. Below describes an essential element that private companies must have when trying to sell their business in order to avoid such mistakes.
Have a Competitive Sales Process.
The best possible outcome for the selling company tends to happen when there are multiple potential buyers. This is because an experienced M&A firm can use a competitive auction process to leverage bidders against each other in order to obtain a higher price and/or better terms in the deal.
Conversely, negotiating with a potential buyer who knows they are the only bidder puts the selling company at a serious disadvantage because they lose significant bargaining power. Therefore, even the perception of numerous interested parties is favourable in negotiations.
Management Advisors Pty Ltd is a highly sought after independent financial services firm. Their team has extensive experience in initiating, sourcing and negotiating M&A transactions to completion.
