How to Maximize Value and Mitigate Risks in Competitor Acquisitions

About the Episode

Jonathan Baker, an M&A advisor specializing in marketing firms, discusses the nuances of selling to a competitor or strategic buyer. Jonathan highlights the importance of trust and the risks of sharing sensitive information with competitors. He notes that while competitors may be more familiar with the industry, financial buyers often have a clearer process and timeline. He also discusses the differences in due diligence and the significance of cultural fit and employee retention in the marketing industry.

“When you’re selling to a competitor, the role of trust is even more important – making sure you trust who you’re selling to, or trust who you’re buying.”

Jonathan Baker

What You’ll Learn

• What to look for when selling to a competitor: Look for patterns of behavior, not just one-off actions, to gauge if the potential buyer has good intentions.
• Understand the motivations and long-term goals of the buyer: Whether they are a strategic competitor or a financial buyer, this can significantly impact the deal structure and post-acquisition integration.
• Tips on handling confidentiality: Be cautious about releasing confidential information, and consider staged information sharing and strong non-compete/non-solicitation clauses in the NDA.
• Insights into the due diligence process: Expect the due diligence process to be more streamlined with a strategic or competitor buyer who understands the industry, but be prepared for them to ask for too much information potentially.
• Art versus science in M&A: Recognize that M&A is more of an art than a science, requiring relationship-building, trust, and flexibility to navigate the nuances of each transaction.

Topics Covered

Want More? Related Resources: 

• Punctuation
• M&A Guide | Selling Your Business to a Competitor
• How To Maintain Confidentiality When Selling Your Business

Meet Our Guest

Jonathan Baker

Head of M&A, Punctuation | Atlanta, GA

Punctuation was founded by industry veteran David C. Baker and is co-owned by Jonathan Baker, who heads up the M&A practice. Punctuation works exclusively with small- to mid-sized independent marketing services firms to help with positioning, lead generation, benchmarking, valuation, and succession planning. Jonathan has worked on dozens of deals both inside and outside the industry and brings a unique perspective as a fellow owner who has gone through the process himself.

LinkedIn: https://www.linkedin.com/company/wearepunctuation/