Owners of successful businesses are often approached by third parties interested in acquiring their firms. As the economy improves, more prospective buyers are emerging.

When I approach firms about representation, I sometimes hear, “We know IVS’ track record and believe you can deliver, but we’re already speaking with a potential buyer. We’d like to see where it goes before moving forward.”

If you are considering a prospective buyer without investment bank representation, I strongly urge you to reconsider for the following reasons:

1. One offer is sometimes worse than no offers. By engaging with a single bidder, you really don’t know what the market value is. Assume the bidder offers $10 million initially, and you enter exclusive negotiations. Even if you negotiate a final deal worth $12 million, your “win” of 20% may leave a lot of money on the table if there were two other firms willing to offer you $13.5 million as an initial bid. Our process will find you several bidders by working with a larger set of private equity groups and a slate of potential strategic buyers with whom BIC Alliance and IVS Investment Banking have existing working relationships. The process will narrow the larger set of reviewing parties to a smaller set of qualified, interested bidders who will establish the bona fide market value of your firm.
2. We can save you time in dealing with potential buyers. We know how time-consuming it is to pull this data together, compile it and interpret it. Many meetings and phone calls will interrupt your day-to-day, profit-driven activities. By allowing IVS to engage in this process, you only have to do it once with an advisor/agent instead of a negotiating adversary. If negotiations with this initial bidder fall through, the time you spent with that bidder is wasted, and you will essentially start over with the next opportunistic bidder. Let us compile the data and put together the “book” on your business. Let us answer and screen most of the questions on your behalf, and you will be free to continue doing what you do best — generating the profit that makes you attractive.
3. We can enhance your negotiating position with any potential buyer. By engaging us as your agent, a prospective bidder will work on the assumption that we are having discussions with other bidders as well. This helps prevent lowball bidding. Further, when you say something during negotiations, you have to live by it simply because you have the authority to speak for yourself. When we are in discussions on your behalf, we can test ideas and the strength of the bidder’s positions much more readily. IVS Investment Banking has been through this rodeo many times before, and that experience alone can result in great counsel for you. In short, we offer a very low-risk engagement proposition that can help ensure you don’t leave large amounts of money on the table while saving you time and strengthening your negotiating position. If the ultimate best bidder happens to be the one you are working with now, wonderful! Odds are that won’t be the case, but if it is, you will know you maximized your return.

For more information, visit ivsinvestmentbanking.com or call Jeremy Osterberger at (281) 538-9996.