Insights

The Magic of Multiple Bids – No Regret Selling

Steps to Selling your Business Part 10.

When new clients sit down with us for the first time, they have often already received an offer or have a particular buyer in mind. Having a single prospective buyer in mind makes the sale process look easy. Perhaps the buyer has already suggested a number, which sounds attractive; thus, what could be an intimidating, exhausting ordeal is imagined as a simple matter of signing a few papers. 

This is an idea we start to question right away. Why aim for one buyer?

There are hypothetical reasons why an informed seller might decide to pursue a single offer, but in our opinion, the good reasons to move in that direction are scarce. Multiple offers are often better than one. We are big proponents of actively working for numerous bidders on a sale.

There’s an old piece of nautical lore that applies here. Sailors are told to take one compass on the journey, or three.

  • One compass forces you to trust what it tells you and to navigate without questioning.
  • Two compasses might disagree, and then you’ll be lost, gambling on which of them is telling the truth.
  • With three compasses, the two compasses that agree will give you the confidence to ignore any wrong direction from the outlier.

The same is true with the sale process. Three or more offers are best:

  • A single offer is what it is; you accept it, and the sale is complete.
  • Two bids only introduce you to what a competitive process could do for you.
  • With three or more buyers involved, there is a substantive offering with multiple bids on the table. This allows your Mergers & Acquisitions (M&A) Advisor to optimize conditions for a spectacular sale of your business.

Multiple bids add to the complexity of the sale process, and the importance of having a skilled M&A Advisor rises with that complexity. 

Multiple bids work for you in a few crucial ways:

  1. They drive up the final sale price.
  2. They allow you to have no regrets when selling.
  3. They give you confidence that the final sale price was an honest one.

Increasing Sale Price

We believe in the value of a well-orchestrated round of multiple bids. At Stillwater, we prioritize getting numerous offers for our clients. 

Presenting a business on paper is challenging work; multiple bids make it even harder. As more interest and more eyes fall on the deal, the structures and valuations must shift and change to keep up. Running a well-executed competitive process can add a thousand hours to the operation, which is a substantial investment for you and your advisors; nevertheless, it’s the kind of work that needs to happen. Do it well, and the gains are spectacular. 

We understand the importance of a robust competitive process, and we’ve got the structures already in place to process an operation of that magnitude. 

If you’re working with someone else, pay close attention to your first conversations, and ask questions. Are they immediately looking at the viability of a competitive process for your company? Do they understand the process? Is it a priority? Are they able and willing to do the extra work it requires? If not, walk away (and give us a call).

No Regrets

Regret is a monster that is content to wait a while before it pounces. You sell your business on a single offer and feel great about it. For a time, you’re busy settling into the next chapter of your life and taking care of a thousand little details and adjustments. Soon enough, two months (or two years) later, you’ll find yourself with time to reflect. When you look back, you may find yourself wondering if you could have done better, questioning the choices you made, and that’s when regret can strike. We don’t want that to happen.

You may have regrets as you reflect on the history of your company. However, your final sale price and the work your M&A Advisors did should not be on that list.

A well-managed competitive process that brings multiple bidders to the table minimizes the risk of regret. That’s what we want for our clients. 

Suppose we, as your M&A Advisors, have done our work diligently and told the story of your business well. In that case, the interplay between multiple potential buyers starts to activate the value drivers and strengths that we have laid out in your story. Some value drivers, for example, are going to take on new value as one or more buyers hone in on them as noteworthy when other potential players may have failed to pay them due attention. Suddenly those value drivers are doing twice the work they were before. A competitive process brings more value to the sale in this way, but it also has another critical function to keep that regret at bay.

Multiple bidders give you confidence when the sale is complete that the final price was an honest one.   

This is important. It brings us back to our three compasses:

  • One offer accepted for final sale? You’ll never know that you got everything you could have. That kind of uncertainty is a breeding ground for regret.
  • Two offers? At least you can go with the highest bidder, but you may find that isn’t enough to keep serious doubt at bay. What could you have gotten if you’d just pushed into the market a little more? What if the low bid was the honest one? What if that was the actual value of your life’s work? If that seems a little dramatic, we’ve seen it. Regret doesn’t play fair, and once it gets in, it’ll work its way into the center of you, where it can do the most harm.
  • Multiple offers—three compasses, or more—then the accurate, honest picture of all your work comes into focus.

The best counter-offensive move against regret is to lay out every value driver and allow multiple bidders to see, evaluate, and compete for the chance to make your company’s story their own.

When you receive the money you deserve, leave nothing on the table, and have taken care of your family, your life’s work was seen, weighed, and found worthwhile. When that happens, there are no regrets. That’s what our Advisors work towards at Stillwater: that our clients have no regrets after the sale because they received an honest price.

It is critical that you work with exceptional M&A Advisers who see the competitive process in this way. It is work that requires expertise and enormous commitment to do well. The gains and peace of mind are worth the effort.


If you are planning to divest your business, or have questions for one of our Advisors, please contact our team today.

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