From the course: Mergers & Acquisitions
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Approach the target indirectly
From the course: Mergers & Acquisitions
Approach the target indirectly
- In many M&A situations, you'll approach the acquisition target through a third party like a bank or a business broker. This protects your organization initially by not identifying who you are. That could tip off the target to take a different action like finding another suitor to sell their business to. Brokers and bankers don't do this for free, though. Understand the costs of getting them involved before you do. The benefits of indirect contact are it keeps you anonymous during the early stages of the process. This reduces the likelihood that the target will pursue other suitors. It keeps the possible deal news out of the market for a longer period of time. By doing so, you're reducing the risk that a competitor takes another action to try and block you. Also, the target is more likely to indicate interest in selling if they're not sure who they might be selling to. If you're a direct competitor of theirs, they might just say no. The downside of indirect contact is banker or…
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