The call comes out of nowhere. Someone wants to buy your company.
Your first instinct might be curiosity, maybe even excitement. But that initial reaction could cost you millions.
Most business owners make the same critical mistake when they receive unsolicited acquisition offers. They rush into arranging meetings without preparation, and seasoned acquirers know exactly how to exploit this.
The pressure starts immediately. They’ll ask for information, continue with questions that essentially amount to due diligence, and turn around an offer very quickly. Once that offer hits your desk, expect regular contact with a maximum two-week review period.
This playbook works because it keeps you off balance and prevents the reflection time you need to make informed decisions.
The New Breed of Acquirer
The M&A world has evolved beyond the traditional strategic and private equity buyers. A new category has emerged that sits between the two.
These “buy-to-hold” acquirers don’t integrate companies. Instead, they acquire multiple businesses, optimise them for profit, and use those profits to fund further acquisitions. Their offers are typically below market valuations with terms weighted heavily toward the buyer.
Given the compressed timelines they impose, sellers often sign without proper legal advice, only bringing in lawyers for the final stages of the transaction.
Understanding who you’re dealing with matters, but there’s a more fundamental question you need to answer first.
Start With Your Post-Sale Objectives
Before evaluating any buyer, ask yourself what you want to do after the sale. This single question should drive every decision that follows.
Each buyer type serves different seller objectives. Private equity sometimes offers the option to roll part of your purchase price back into the business under their ownership. This creates potential for additional rewards when the PE firm eventually sells, but only if you want to stay involved.
Strategic acquirers often allow sellers to exit early, which might align with your retirement plans or desire to pursue other ventures.
The buyer’s model matters less than how it fits your personal timeline and goals.
The Ever State of Exit Readiness
Ideally, you should maintain what I call an “ever state of exit readiness.” Your business metrics should be easily accessible, you should understand your valuation drivers, and you should track M&A deals in your sector.
Most importantly, you should know what you want from an exit and when. This clarity makes it easy to shut down inbound calls before they begin, protecting you from what can become very distracting conversations.
If you don’t have this foundation in place, establish it before engaging in any meaningful M&A discussions.
The Hidden Cost of Distraction
M&A discussions become intensive quickly. They can completely divert your leadership team away from day-to-day business operations, focusing everyone purely on a possible deal.
For smaller companies especially, this performance impact is measurable. When your business suffers during negotiations, it directly impacts the deal on the table, often resulting in a lower price later.
This creates a vicious cycle where the very process of exploring a sale damages your negotiating position.
Maintaining Process Control
Never share sensitive information without a confidentiality agreement in place. Use initial conversations to understand the buyer’s strategic rationale for the acquisition rather than providing detailed company information.
When seasoned acquirers push for information, remember that you control the pace and scope of what you share. Their urgency doesn’t create an obligation for you to respond immediately.
Establish clear boundaries around information sharing and stick to them regardless of pressure tactics.
Understanding Your Leverage
Knowledge of your business’s market value provides essential leverage in any negotiation. Without this baseline, you cannot accurately assess whether an offer represents fair value.
This valuation knowledge also helps you decide between accepting a single offer or running a formal competitive process. While a formal process requires more time and resources, it creates competition among buyers and can maximise your sale price.
The decision between these approaches should be based on your business valuation and the level of genuine buyer interest you can generate.
Recognising Pressure Tactics
Legitimate acquirers understand the significance of selling your business and will allow adequate time for consideration. Pressure tactics should be viewed with scepticism.
Common pressure tactics include:
Immediate information requests that bypass proper introductions and confidentiality agreements.
Rapid-fire questions that amount to due diligence before you’ve agreed to proceed.
Artificially tight deadlines on offers, typically two weeks or less.
Frequent contact designed to maintain momentum and prevent reflection time.
Each of these tactics serves to keep you reactive rather than strategic in your approach.
The Professional Guidance Decision
Before making any decisions, seek advice from experienced advisors who can provide guidance on market value, sale terms, and negotiation strategies.
The cost of professional guidance is minimal compared to the potential value at stake in a business sale. Experienced advisers can help you avoid common pitfalls and ensure you’re making decisions based on complete information rather than artificial urgency.
They can also help you structure a process that maximises value while protecting your business operations during the evaluation period.
Taking Back Control
Remember that unsolicited approaches are common in business acquisitions, but the power remains with you to determine timing and terms.
You don’t owe anyone a quick response or immediate access to your business information. Taking time to prepare properly isn’t just advisable, it’s essential for securing favourable outcomes.
The next time your phone rings with an acquisition offer, your response should be measured and strategic. Thank them for their interest, explain that you’ll need time to consider their approach, and then take the steps necessary to put yourself in a position of strength.
The difference between a reactive response and a strategic one can be worth millions in the final transaction value.