Approaching an Owner about Acquisition? 5 Don’ts

Finding the right company to acquire can be a significant hurdle for many strategic acquirers. In our State of Middle Market M&A 2019 report, 41% said they faced this challenge. Buyers must not only identify a company that fits their strategic criteria, but one that is willing to sell, which is not an easy feat, especially when it comes to privately-held, not-for-sale companies. When speaking with owners about M&A, here are five “don’ts” to avoid if you want to be successful:

  1. Don’t be uneducated – Don’t expect an owner to say “yes” if you are cold-calling without having done any preparation. This means reviewing the company and owner, and targeting your pitch before picking up the phone so you can have an educated and tailored conversation about their business.
  2. Don’t be boring – Many entrepreneurs are constantly fielding pitches from competitors, brokers, other strategic players, or even private equity firms so make sure you don’t get lost in the pack. Spamming with mass emails, letters or even calls that are too generic are a surefire way to get you ignored. The best way to stand out and spark interest is to speak directly to an owner’s drivers/motivators or even hobbies. For example, if they love basketball, you might talk about March Madness.
  3. Don’t do all the talking – The whole point of initiating contact is to begin a dialogue to determine if you’re organizations are a good fit. Nothing is a bigger turnoff to an owner (or to anyone for that matter) than a person who doesn’t let anyone get a word in edgewise.
  4. Don’t talk cash right away – Yes, financials are important, but finding the strategic fit between your organizations should come first. In the same way that you interview job candidates, you find if you’re both aligned and then move into specifics.
  5. Don’t give up – It’s hard, we know, but it can take several tries and several forms of communication to break through. Persistence (without being obnoxious) is key. Sometimes people just don’t get to you, but the squeaky wheel always gets the oil. Continual communication is important so you can build momentum. Once you do get their attention, make sure you continue this contact.

Learn more about contacting owners in our upcoming webinar on April 11.

“The First Date”: Contacting Owners and Successful First Meetings

Date: Thursday, April 11

Time: 1:00 PM – 2:00 PM EDT

CPE credit is available

Photo by bruce mars from Pexels