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Strategic acquisition: how to approach shareholders?

Written by Peter-Jan Roose

BrightWolves is all about helping our clients through transformation while creating the biggest potential impact for them. As a consequence, we are regularly involved in giving much needed support during Mergers and Acquisitions, alternatively working on the buyer and on the seller side.

In a recent negotiation, our client wished to acquire 100% of the shares of the target company, while creating a commercial relationship with the current shareholders. A balanced approach towards the shareholders was crucial. In such a situation, there are four golden rules to keep in mind:

1. Create a win-win

The deal must be a win for both parties, which is much bigger than only the price you’re willing to pay for the deal. This means that you need to convincingly prove to the current owners that the deal will lead to an added value for their business.

In this specific case our client was mainly interested in three things: (1) creating additional volume, (2) accessing new markets and (3) increasing market share.

On the other hand, the current owners would get: (1) access to the newest technologies, (2) best in class processes, (3) a better customer experience for their own customers and, of course, (4) a fair price for their shares.

2. Show that you understand the target's needs

To create an effective win-win you need to truly understand the other side. This demands a lot of research. Make sure you know their values, long term strategy and what they find truly important. It’s a powerful way to convince them of the added value you bring to the table. It also shows that you care about the deal and about their needs.

3. Don't give away your entire business plan

At the beginning of any healthy relationship, you don’t show your best cards right away. You keep some things to yourself. A little bit of mystery can go far. Show enough to generate interest, but don’t give awayour entire plan. If you’re successful, the other side will very much look forward to closing the deal and starting the relationship.

On the other hand, if you reveal too much information, the risk is that the other side will just execute your plan themselves. The result: you lose the deal and create a (potentially) more effective competitor.

4. No deal is better than a bad deal

If, at the end of the negotiation, the water remains too deep, then it’s better to have no deal. Be patient. If you succeeded in ticking all the above-mentioned boxes, it’s likely that the deal might be put back on the table in the future.

With these four rules in mind, the chances of successfully closing a deal will be higher than ever before.


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