Empower Your Clients with the Best Exit Strategy: Insights for Accountants 

As a trusted accountant, you’re often the first to hear when your business-owning clients begin contemplating an exit. However, many business owners – and even their advisors – aren’t fully aware of how the right M&A process can significantly impact the success of a sale. Without strategic guidance, sellers often fall into suboptimal sale processes, such as setting a fixed price or engaging with a single buyer, which can lead to diminished value and unfavorable terms.

The solution? A well-structured, competitive process known as a limited auction. This approach, managed by experienced M&A advisors, creates a competitive marketplace for private businesses, ensuring sellers achieve the best possible price and terms. By involving multiple preselected buyers, maintaining confidentiality, and using competitive bidding dynamics, a limited auction puts the seller in control – yielding optimal results for both the business owner and their trusted advisors, like you.

Below, we’ll outline how the limited auction process works and why partnering with Western M&A Advisory can enhance your role as a trusted advisor, ensuring your clients get the best possible outcome when the time comes to sell their business.

1. The Problem: Missed Opportunities with Suboptimal Sale Processes
 Many business owners believe that the best way to sell their company is to set a price and put it on the market or to respond to unsolicited offers from private equity groups or strategic buyers. Unfortunately, these approaches often yield less-than-optimal outcomes.

  • Fixed Price Sales: Setting a fixed price doesn’t leverage the market to its fullest potential. Sellers may leave significant value on the table by not exploring what a competitive marketplace could yield.

  • Single-Buyer Processes: Engaging with a single buyer locks the seller into that buyer’s timeline, terms, and proprietary process. The lack of competition gives the buyer undue leverage, often resulting in less favorable terms.

  • Buyer-Controlled Dynamics: Without competition, the buyer can dictate post-LOI terms, potentially reducing the agreed-upon price or imposing unfavorable deal conditions.

2. The Solution: Creating a Competitive Market with a Limited Auction
 A limited auction, managed by skilled M&A advisors, creates a structured, competitive environment designed to maximize value for the seller. Here’s how it works:

  • Teaser and Buyer Selection: A group of preselected, qualified buyers is contacted with an anonymized teaser or tear sheet. Interested buyers sign an NDA to access a detailed marketing package.

  • Indication of Interest (IOI): Buyers submit an initial bid by a set deadline, fostering competitive pressure to present strong offers.

  • Management Meetings: A subset of the strongest bidders is invited to meet the seller’s management team via video calls or in person.

  • Letter of Intent (LOI): Final bidders submit detailed LOIs, including price and terms, allowing the seller and M&A team to negotiate the best outcome.

  • Closing Process: Once an LOI is signed, the deal enters the closing phase, typically completed within 90 days.

3. Why This Matters for You and Your Clients
 By introducing your clients to the limited auction process through Western M&A Advisory, you:

  • Help your clients achieve the best price and terms for their business.

  • Strengthen your role as a key advisor in their most critical financial decisions.

  • Gain access to our expertise to complement your own, making you an even more valuable partner to your clients.

4. Partner with Western M&A Advisory
 At Western M&A Advisory, we specialize in guiding business owners through every stage of the sale process, from market preparation to deal negotiation and closing. We’d love to collaborate with you to ensure your clients receive the best possible outcomes when it’s time to exit their business.