Negotiation

Effective strategies for negotiating a deal.

After signing a letter of intent (LOI), there are still many steps to take before closing a transaction including due diligence, final valuation, negotiations, papering legal documents, and integration planning.   With many complex, specialized steps to move the deal forward, this period can be challenging to navigate, but also presents opportunities for strategic acquirers who have […]

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When negotiating for an acquisition, we always recommend you, as the buyer, try to match the seller’s negotiation team. Many owners are selling their company for the first time and in most cases their company will be smaller than yours. Arriving to the negotiation table with a swarm of lawyers can be overwhelming and may […]

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We had been in negotiations with the seller, Martin, and his team all day and despite diverging perspectives on a few issues we had managed to nail down several important aspects of the agreement involving intellectual property and key employee contracts. The next afternoon when we resumed negotiations, Martin brought up the employee contracts again […]

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Negotiating for an acquisition is unlike most other negotiations where once the deal is finalized, you and the other party will part ways never to see each other again. With strategic acquisitions, often you will continue working with the seller once the transaction closes so protecting your relationship throughout the acquisition process, including during negotiations, […]

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One of the secrets to negotiating a successful acquisition is to negotiate in parallel, not in series. Rather than negotiating each point one by one, put all the issues on the table and discuss them at the same time. While it may seem overwhelming to juggle multiple issues at once, this approach is a much […]

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Getting both buyer and seller to agree to and sign a letter of intent (LOI) is a critical milestone in the M&A process. The LOI provides the basic guidelines for the deal moving forward: It outlines major issues like fundamental terms, price, agreement on major business points, and sets forth buyer exclusivity for a period […]

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In merging two distinct companies there are many legal technicalities that need to be reviewed to finalize the deal, so it’s critical to hire an attorney to help cover your bases. Lawyers typically assist in drafting legal documents like the letter of intent and acquisition agreement, and even employment agreements to keep key employees at […]

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During negotiations, a third-party M&A advisor acts as a buffer between buyer and seller. As you can imagine, negotiations can become quite intense and emotional on both sides and we want to do everything in our power to preserve a harmonious relationship between both parties. Having a good working relationship with the seller is important, […]

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When it comes to negotiation, we often hear about “win-win situations” where both sides benefit from the deal no matter what. While I understand the need to come to a consensus in order to move a deal forward, we’re not big fans of negotiation for a “win-win” because it implies you are also negotiating for […]

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Negotiating for an acquisition is quite a bit different than any other type of negotiation. Unlike a debate or argument, where your goal is to soundly best the opposite side no matter the cost, in acquisition, you must achieve your goal while maintaining a positive relationship with the opposite side. This is because you’ll likely […]

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Price is often the number one focus in mergers and acquisitions and everyone is eager to get down to the numbers. However, as you might expect, buyers and sellers have very different expectations on price, which can lead to friction between the two parties. On the one hand, most sellers plan to offer their business […]

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After signing a letter of intent, you expect the deal to close, but there are a number of reasons acquisitions fail ranging from regulatory hurdles to unexpected challenges that arise during due diligence to cultural clashes. In my last post, I discussed reasons deals fall apart even after both parties sign a LOI. Here are […]

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For an owner of a privately-held company, the business is their baby and using hard-nosed tactics to negotiate for the lowest price is ill-advised. The human factor cannot be overlooked when pursuing M&A and establishing trust with an owner is critical. Buying a privately-held business is not like buying a car where you can negotiate the […]

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  Q: When a company has two owners that are equally involved is it advisable to ask them to choose only one negotiator, especially at the final stages? A: Negotiating with one owner of a company and convincing them to sell their business can already be challenging. The situation becomes more complex when the company you wish to […]

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Negotiating during an acquisition can be tricky at times. How firm should you be? What does the other side really want? How can you get the seller on board? It can be tempting to hand it over to the experts when you reach this point, but this would be a mistake. During negotiations, your primary […]

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SABMiller has agreed to Anheuser-Busch InBev’s $106 billion offer to acquire it. Together, they will form a global beer conglomerate with $64 billion in annual revenues that is estimated to make up 29% of global beer sales. The new company would be three times bigger than its next competitor, Heineken. Given that this is such […]

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Q: Who is the internal champion on the M&A team? What is their role? A: The internal champion is an important member of your M&A team. Your acquisition team should include people from your own company such as the CEO, CFO, the internal champion, and functional leaders, and external experts such as lawyers, accountants, valuation experts, due diligence experts […]

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Negotiation is a critical skill, especially in mergers and acquisitions where negotiating involves more than forcing the other party to agree to your terms. Experienced M&A negotiators understand the importance of the human factor. In acquisitions, negotiations are not about winning or losing, but bringing two sides to an agreement. This concept is extremely important […]

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Buying a company is not like buying a car where you walk away and never see the seller again. In many cases, it is more like buying an automobile with the seller thrown in. Especially for strategic acquirers, key employees from both buyer and seller are likely to work alongside one another in the newly […]

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Time your negotiations by understanding owner psychology. Everyone wants to talk about price in mergers and acquisitions. It’s often the number one focus of buyers and sellers…but for opposite reasons. Both are likely to say they are looking for a “good deal,” but this can have a completely different meaning depending on the perspective. Buyers […]

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