Pre-positioning commercial relationships for M&A exits
The guest argued that private companies aiming for an M&A exit must establish commercial relationships with strategic buyers at least two years prior to a sale process.
The argument
The guest asserted that successful M&A exits do not happen cold; rather, they are the culmination of existing commercial partnerships. When an investment banker is eventually hired, these pre-existing partners (who already understand the company's value) can be pressured to put strong preemptive bids on the table.
The thesis, stress-tested
✓ What validates it
- ✓Establishment of commercial pilot programs or distribution agreements with major strategic players
- ✓Inbound strategic interest or preemptive acquisition bids from existing partners
▸ Risks discussed
- ▸Strategic partners may decline to bid, signaling weak market interest
- ▸Commercial relationships can sometimes create dependency or limit the buyer pool if exclusive terms are in place
Hear it yourself
"If you're looking to sell a company, you need to start building relationships with strategic buyers that you will have a commercial relationship with. And by building those commercial relationships, when you do decide that you're ready to exit, if you're going to do an m and a exit, you have the first phone calls to make right there."
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