Several years ago a prospective client came to us with an offer in hand to buy his company for $10 million.  The owner had a feeling the price was too low, but wasn’t sure what his company was worth.  The company was growing tremendously, was extremely well run, and was in a niche that we knew many buyers would be excited about.  Upon accepting the engagement we made it clear to the buyer that we were also talking to alternative suitors.  In less than 30 days, the original buyer increased his proposal from $10 million to $25 million in cash at closing, plus another $15 million if certain prospective targets were met.  The seller closed the deal about 60 days later, and has since gotten every dime of the additional $15 million.

It pays to be PATIENT, yet PERSISTENT.

A couple of years ago our firm sold a consumer products company, which was headed for about a $12 million sales year, and was profitable at almost 1/3 of sales.  The company was growing rapidly, and for its last completed year had only about $7 million in sales.  We received 18 offers to buy the company, most at a $15-20 million purchase price level. (This equated to a pretax earnings purchase multiple of 5.5-6.5, on HISTORICAL earnings – but gave little heed to the tremendous growth in process.)   We received 2 offers well north of $30 million – one at $32 million from a private equity firm with some related industry holdings, and one at $35 million from a strategic industry player. (Only these most competitive buyers were willing to pay a sensible price on current trends and immediate short-term prognosis.) The equity fund buyer was flexible on owner transition terms, was committed to a very fast closing timeline, and was generally positive and good to deal with, boding well for the future of the seller’s long term employees and the company he had built.  Our client accepted their $32 million offer.