“I felt so vulnerable. I didn’t know what to do or what to talk about,” Dan told me. As the CEO of a food manufacturer who was pursuing acquisitions, he had a first meeting with an owner of a packaging facility before he engaged Capstone. When we met he expressed feelings of uncertainty and how he realized that he was out of his depth with the CEO. While his meeting didn’t end in disaster, it also wasn’t a resounding success. Dan certainly wished he had been better prepared.
This scenario is quite common, especially for first-time acquirers who are pursuing not-for-sale acquisitions. Meeting with an owner and convincing them to let you buy their company is a daunting task for anyone. Depending on the owner, it can be challenging even for me with over 20 years’ experience. Broaching the topic of acquisition can be awkward, even emotional.
Here is advice for meeting with an owner whose company you are seeking to acquire:
1. Remember the human factor
Don’t forget that the owner is a person who wants to be respected and listened to, just like you. The acquisition process is about developing a relationship, from that initial call to your first meeting and to subsequent meetings through due diligence, closing and integration. It may sound like simple advice, but common courtesy matters.
2. Put your best foot forward
In some ways, meeting the owner is like a job interview. You only have one chance to make a first impression so be fully prepared. Share why allowing you to buy their company is the best decision. Write down what you will actually say to the owner and practice this answer out loud. Role play with a member of your staff if you need to get comfortable and make your argument convincing.
3. Prepare materials
One way to make a strong impression is to prepare a first meeting presentation and takeaway materials. These should demonstrate the overall vision you have for the acquisition without appearing to be abstract or vague. Address specific areas where you see synergies between the two companies.
4. Leverage your research
At this point you likely have a wealth of information from market and prospect research conducted during the M&A process. Use this research to your advantage to demonstrate your level of interest and to strengthen your credibility.
5. Understand your audience
Especially with not-for-sale acquisitions, it’s important to understand what motivates the owner. What will convince them to sell? Prestige? Money? Health insurance for their entire family? Community activism?
For example, we once won a for-sale auction even though we were not the highest bidder. Why did the owner sell to our client? As part of the agreement, our client planned to keep the factory open and retain the entire staff. The owner told us, “I live in this town … if they had shut down the plant, a lot people – including friends and family members – would have been hurt.”
To find out more about contacting owners, read my article in AMA Playbook “Approaching an Owner for a Possible Acquisition? Don’t Write, Call.”