The short answer to this question is no. Some owners may sell to the highest bidder, but this is not always the case. Differentiating by price alone is problematic for a number of reasons, the most obvious being that someone can always outbid you.
In addition, when it comes to privately-held transactions, especially, we find that owners care about more than just price. Factors include price, community involvement, and how you plan to treat employees. Overlooking these non-financial factors is a big mistake.
For privately-held transactions, the company is the owner’s “baby” so often they will care what happens to the business after sale. For example, if a buyer plans to tear down the company and fire all the employees, the owner might not want to sell the company to the highest bidder.
While price is a very important factor, it is a binary decision. The owner will either think it is enough or not enough. If you limit your conversation to just price, you have very limited options during negotiations should the seller have unrealistic expectations of value. Providing insurance or promising to keep jobs for long-time employees, may be a way to “trade” with the owner on a high price.
While being the highest bidder does have its advantages, it does not guarantee you will win the deal. Strategic acquirers should look beyond price to become the preferred buyer.