You Get a Vacation, you Get a Vacation

I have been a business advisor for the past twenty-three years. I have been the quarterback of most types of transactions. Early in my career, after successfully helping ten or so business owners transition their life's work, I was amazed at how different each transaction can be. In fact, I started documenting each one and, for a moment, contemplated writing a book about each experience. I even had a title for it: Bullet in the Head & Keep Walking Towards the Gun (the art of being a business broker). Any broker who has been doing this for a while just got a big smile on their face because they know exactly what I mean. For those of you who don't, a deal dies on average three times, and it's our job to figure out why and fix it. Most of the time, we can, but there's the occasional death that cannot be resurrected. Those are the stories that should be highlighted in blogs, podcasts, and print.

I want to share the story of the deal we recently closed: the clients had built a wonderful company over the past 20+ years, and now it was time for them to transition to the next stage of their lives. Before signing the engagement, our soon-to-be client said, "If you get us anything north of $25MM (Target Price), we will take you and your deal team (and spouses) to Mexico for a week". Not one time in the past two decades had a client made an offer like that. We all looked at each other and said, "Deal." As we moved through our proven process, we knew our "Silent Auction" could produce the outcome we all desired. We fielded multiple offers ranging from $14MM to $33MM. As you see, there was a large delta in the perceived values. Our job as a trusted advisor is to vet those offers and determine not only which company is the best fit for our clients' needs, but also who can get to the closing table.

After developing a target list, creating marketing materials, and managing over 50 NDAs, we received 11 Indications of Interest (IOIs). Three of the seven IOIs were invited to submit Letters of Intent (LOIs), but we needed to let them know they had competition and asked them to sharpen their pencils. It worked, as the Silent Auction often does; we were able to increase an offer to $27.2MM, and after a successful closing off to Mexico, we would go. That same team was in an engagement (pitch) meeting this week, not ever discussing the previous deal. The seller said that if we got them over their Target Price, they would take my deal team and spouses to Mexico for a week. My boss was in this meeting, and we looked at each other in absolute amazement. The fact that we were just talking about the Mexico trip from the previous deal and our new clients literally offering the same deal made me feel I needed to share this story. I'm not saying you need to take my deal team and their spouses to Mexico when we successfully sell your company for more than you were expecting, but it would be nice.