July 10, 2017
Negotiations: The “Human Element” in Small Company M&A
Here’s a Norton Rose Fulbright blog that talks about some of the unique aspects of negotiating an acquisition of a small, private company – including the fact that for many sellers, it’s not just a business deal. This excerpt addresses the importance of keeping the seller’s perspective in mind during negotiations:
While the more seasoned buyer could be approaching the deal from a purely business perspective, the seller’s sentimentality towards its company, and its lack of experience in M&A deals, provides the seller with a different perspective—one that is less purely business, and more personal and emotional. Perhaps the seller truly views its employees as family, and wants to ensure that they will be treated well. Or maybe the seller wants a guarantee that it will be able to keep its office, wine or art collection, or company car post-closing.
These may not seem like big issues to a sophisticated buyer, but they can be very important to the seller. Efforts to address issue like these often won’t cost much, but can help the seller to feel that it has extracted important items of value during the negotiation process.
– John Jenkins