Consulting for Business Buyers & Sellers

Approaching a competitor to discuss the sale of your business

We can help you approach competitors, while shielding your identity until the competitor has indicated and interest and signed a non-disclosure agreement. In some cases you already know your competitors well and all you'll need is an intermediary to send a letter and make a few phone calls on your behalf. However, if you are not knowledgeable about your competitors we can help identify who the best people to approach are and help with a complete strategic presentation.

Often, a competitor may be the best prospect to sell your business. Some of the advantages to selling to a competitor include:

• A strong competitor will have the ability to finance a deal.

• Competitors are already familiar with the industry and in some cases with your particular business

• Elimination or reduction of competition may have value to the competitor, especially if it increases the competitor's pricing power.

• If you are financing part of a deal, when selling to a successful competitor, there is less risk that the competitor will be unable to run your company and will default on the note.

• There are potential synergies, other than pricing power, such as reduced R&D costs, and additional sales over which both fixed costs and overhead can be spread. These synergies can result in a premium price being paid for the business.

However, approaching a competitor has pitfalls. A competitor may use the opportunity :

• To try to gain strategic insights

• To attempt to hire away key employees

• To try to "steal" customers

These dangers can be reduced, but not eliminated.

If you need help with approaching a competitor or any other aspect of the business buy-sell process, call us today.

Approaching a competitor to discuss purchasing their business

Approcahing a competitor to discuss buying their business can be difficult. The competitor will worry that their willingness to even discuss the sale of their business will be used to their disadvantage. By talking to them as a thrid party and offering them a non-dsiclosure agreement we can often overcome the initial fear and open negotiations.