Target all potential buyers

The question of how and when to target potential buyers is important.  Key to the form of approach is the issue of confidentiality. First approaches are generally made on a no names basis and confidentiality or non-disclosure agreements signed before the company for sale is identified.

It is always a fine decision, and one that will be taken in consultation with the owner.

On one hand, there is a big advantage in approaching prospective buyers within the same time-frame as this will increase the chances of stimulating competitive bidding.  However, in some circumstances there will be several different types of buyer group, one or more of which could be more likely to pay a higher price because the business is more valuable to them.  Obviously it would be better to give those buyers the chance to buy first, rather than risk having to accept a lower price because of timing effects.  Additionally there is always the risk of adverse reaction when a company is aware that a competitor is for sale and it may be preferable to delay advising certain less honourable potential targets.

In terms of how to target buyers, clearly the first stage has to be the identification of potential buyers and their classification into their appropriate buyer groups - trade, institutional, investor, MBI, MBO or BIMBO.  CMR has a wide range of executive skills in every industry and will be able to supplement the owner's knowledge in developing the target list of prospects.

The timing is vital. Having decided which particular buyer group is going to be targeted first, the next stage is to make the initial approach and to do it in a way that is most likely to develop bidding competition.  This always has the effect of increasing the eventual sales price.

Quite uniquely, CMR has its own bank of private investors and senior executives who could be interested in a MBI (management buy-in) purchase of the business.  Generally MBI purchasers will pay a higher eventual price, although part of the consideration will usually be paid downstream, as negotiated with the owner.  It is a useful additional source of potential buyers, especially for retirement sales where the existing owner may be prepared to continue in the business for a time, and the incoming executives/ buyers will appreciate a handover period.

To discuss the sale of your company in absolute confidence - please contact CMR by phone (0207-636-1744) or email to cmr@cmruk.com or complete this online form.  The earlier you contact us, the earlier we can help - don't spend time on plans and presentations without first getting our advice - it will save you time and money!