Should I just sell to the acquirer who keeps calling me?

The short answer

An acquirer keeps calling about your physical therapy business. Should you negotiate with them directly? Short answer: no. Paul Martin, Founder and President of Martin Healthcare Advisors, explains why and what to do instead.

Key points:

• Do not negotiate directly. Ask a few open-ended questions and listen.
• Do not sign their NDA. It starts their process and gives them control.
• Acquirers want a "one-off," where you only talk to them and they hold the steering wheel.
• Get an Outside-In Assessment first so you know your current value and every acquirer who would be interested.
• Then go to market on your terms. Moving from defense to offense gets you a better outcome.

Full transcript

If one acquirer keeps calling you, negotiating with them directly feels efficient, and that is exactly why it is a mistake that is very commonly made. First, do not negotiate with them directly. We advise asking a few open-ended questions and just listening and letting them talk. We also advise not to sign an NDA, because that will essentially start a process from their perspective, and they will work you to get data and to try to get you to provide them with information.

Acquirers are always trying to do what is called a one-off. That means that you are only communicating with them, and as I always say, they have full control of the steering wheel and the process moving forward.

My best advice is that this is the moment for you to have an Outside-In Assessment. That way, you know the current value of your business, and you know who all of the acquirers are that would have an interest in your business. Once you have gone through that assessment and planning, now you go into the market on your terms rather than responding to their terms. That is what moves a business owner from being on the defense to going on the offense. And on the offense, you will always get a better deal.

Transcript lightly edited for readability.