It is common for businesses that are showing rapid growth and success to be approached with unsolicited acquisition offers. However, just because another business presents you with an acquisition offer doesn’t mean that it’s always a good offer. Therefore, it’s important for businesses to evaluate each offer carefully in order to ensure that it is in the best interest for your business before agreeing to it. Additionally, it’s also a good idea to create an intense competitive situation in order to maximize the valuation of the potential merger as well as the overall impact and future of the business. Here we will discuss how to interpret unsolicited M&A offers, how to determine if an offer is worth pursuing and how to respond to each offer.
For example, two out of three technology businesses (particularly smaller tech companies) receive at least one unsolicited acquisition offer during extreme growth phases. Because the market is currently in an active M&A cycle, many smaller businesses are receiving unsolicited M&A offers by larger companies. Here are some key pointers to take into consideration as your company receives potentially lucrative unsolicited M&A offers.
In summary, businesses that are showing rapid and successful growth and expansion are likely to be approached with unsolicited offers. However, each and every offer should be approached and considered with the best interest of the business in mind.
Business owners, entrepreneurs, and executives should evaluate each offer carefully, assessing the terms and the value of the offer, and then run a competitive analysis to determine the overall value of the business as well as attract likely buyers that are the best fit for the business’ strategy. Businesses that take this approach when receiving unsolicited offers often result in the most successful M&A deal.