Secret Seller episode 5 – Receiving the offers

This month, our Secret Seller has reached a crucial point in their journey, as they start to receive offers from potential buyers.

So, if you’ve been following their passage through the exit process, keep reading. However, if you haven’t read the previous episode, “Understanding the firm’s value”, check it out first.

Getting offers from potential buyers is exciting and daunting; it’s easy to become lost in a sea of pitches and propositions. However, Brian and the team at The Exit Partnership were on hand to help.

Our Secret Seller says: “The time had come; I’d had meetings with 11 different companies who were interested in our firm. I had a rough idea of what we were worth from calculating the figures, but before I had even had my last meeting, I had already received my first offer – which was looking very nice indeed.

“There is that worry that you’ve gone through all this and then no one wants you – a bit like speed dating and going home alone!

“But offer number one was in.

“Overall, we received five realistic offers, and some genuinely lovely feedback from two of the potential buyers who just weren’t in the right place to offer at the time but would have loved to have done so.

“From the five, we narrowed it down to two companies. In many ways, both offerings were very similar.

“Both had similar investment propositions to us and a “client comes first” approach, which was really important – we wanted this to be as seamless as possible for our clients so a culture before cash (as Brian says) is the priority. We already had our succession advisers in place, and whilst some changes would be inevitable, we wanted a buyer who would go to great lengths to make the transition as smooth as it could be.

“Both had teams of technical and admin support, and both wanted to keep our admin team.

“But there were some differences. To make things nice and easy, I’m going to call them Company A and Company B.

“Company B didn’t want the office, but Company A did. This was a biggie – especially thinking about the team and making sure we did right by them.

“Company A was offering an EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) deal while Company B was offering recurring revenue – if you read my last article, you’ll know that recurring revenue appealed a lot more (what with my inner control freak and all that!).

“Company A was offering slightly more money than Company B. Although at this point, money wasn’t the biggest factor – getting the right cultural ‘fit’ was (did I mention that already?).

“Brian arranged additional meetings with both Company A and Company B so, with Brian by my side, I could ask those all-important questions to help us decide.

“Company B was still my favourite, the office closing being the only fly in the ointment. They seemed genuinely excited about buying us and I got that feeling that our clients and our staff would be well looked after. The second meeting only reinforced that opinion.

“My meeting with Company A went well, and they did offer to change their offer from EBITDA to a recurring revenue one, but when it came to the office, they said that they were looking at other companies in our area and keeping the office may not happen after all!

“I sat down with my two exiting advisers, and we ran through the pros and cons of both companies.

“We felt that we would rather our clients and our staff have one big change, rather than two. We didn’t want to announce we were merging and then three to six months later be in the situation where our clients and staff are told the office is closing. So, let’s do it once.

“Company B was our number one choice.

“I let Brian know, we discussed it some more, and he fine-tuned the deal with the preferred buyer. Five months after I’d had my first meeting with Company B, we accepted their offer.

“And that’s when the real fun begins!”

Get in touch

If you are looking to sell your business and want an organisation that looks after you and every single aspect of the process, speak to Melo. Email hello@melo.co.uk or call 0113 4656 111.