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M&A Insights – Mark Young, Managing Partner, CKS Advisors

Welcome to the January 2021 edition of M&A Insights. Our goal at CKS Advisors is to help you stay up to date on the Mergers and Acquisitions climate.

No doubt you have received those calls and letters – “We want to buy your business” and/or “We have a client who is interested in your company”. This month, we offer insights on what to do if an unsolicited offer comes your way.

First, Take the Time to Seriously Consider the Opportunity:

  • Receiving an unsolicited offer for your business will likely catch you off guard. Whether your first instinct is to say “yes” or “no”, it is important that you take the time to truly consider the opportunity before making a decision.

Second, There are a Number of Items to Consider:

  • Control Your Impulses – Receiving an unsolicited offer can be exhilarating, but immediately responding or telling employees can cause problems. Have a well thought out plan before reacting.
  • Do Your Due Diligence – Understand who is making the offer and why they are making it. It is important to evaluate not only the offer but also who it is coming from. You want the company you built to stay in good hands.
  • Consult With M&A Professionals – Investment bankers and other professionals can help you assess the validity of an offer, advise on what the process might look like if you choose to move forward, or offer relevant alternatives such as initiating a normal M&A sale process and including this buyer in that process.
  • Consequences – There is a reason you received an unsolicited offer, simply put, you are in the way of somebody in the market. Not accepting the offer may signal an unwillingness to sell, which could increase your competition. Conversely, accepting the offer may weaken your negotiating power compared to selling through an auction process.
  • Timing – Is now the right time to sell? Ask yourself this question and look at it through a personal and a business lens. But remember, the deal presented may not be available in the future, so put serious thought into answering this question.
  • Alternatives – Maybe the timing to sell is right, but the offer on the table isn’t. If that is the case, connect with an M&A advisor to discuss the avenues for moving forward.

 

In Summary:

  • When faced with an unsolicited offer, take a step back and strategically evaluate it and the overall notion of selling your company.
  • Don’t do it alone. Numerous considerations need to be evaluated. Before reaching a decision, involve M&A professionals to help you navigate the issues.

If you would like to learn more about how we can help with evaluating an unsolicited offer, the M&A market in general, or are ready to take the next step to explore your options, we would be glad to meet. Please contact me at 480-351-8533 or myoung@cksadvisors.com.

This post is for informational purposes only and does not constitute an offer, invitation, solicitation, or recommendation to buy, sell, subscribe for, or issue any securities. While the information provided herein is believed to be accurate and reliable, CKS Advisors, LLC and Ashland Securities, LLC make no representations or warranties, expressed or implied, as to the accuracy or completeness of such information. All information contained herein is preliminary, limited and subject to completion, correction or amendment. It should not be construed as investment, legal, or tax advice and may not be reproduced or distributed to any person. Certain Principals of CKS Advisors, LLC are registered representatives of Ashland Securities, LLC Member FINRA, SIPC. CKS Advisors, LLC and Ashland Securities, LLC are separate and unaffiliated entities.  Securities and Investment Banking Services are offered through Ashland Securities, LLC.