I mentioned before that I was working on a new startup. As part of that, I am looking to accelerate growth by buying a business. Unfortunately, earlier this week, I found out that a company I was looking to buy signed a letter of intent with another buyer.
I am not completely surprised by this as I discovered this opportunity only recently and late in the process. What does surprise me is that they started initial discussions with me and didn’t tell me that they had another buyer further down the road ready to make an offer.
I have acquired dozens of companies over the years on behalf of my employers. It’s a different experience when buying a company for yourself. It’s difficult to stay unemotional and detached when it’s your money on the line and you’ll be responsible for running the company after the transaction is completed.
The one thing that’s the same is that sellers want to maximize their profit from the sale. This doesn’t always mean they take the highest price, but it does usually mean that they entertain all serious offers.
In this situation, the owner is retiring. And by accepting another offer without even hearing what I had to say, he probably left money on the table.
For me, it’s not the end of the world. While I liked what I saw about this business, there will be others.
My old boss used to say, sometimes the best deals are the ones that you don’t do.
There is still a chance the deal with the other buyer falls apart. In which case, I’ll take a more detailed look at the company and decide if it’s worth pursuing. But if the deal falls apart, I will want to know much more about why it happened.
Until then, I’ve got my eyes on a few other opportunities. Maybe I’ll wind up liking one of them even more than this deal.
Either way, it’s fun being on the hunt for something new.
Financial Slackers, have you considered buying a business rather than working for someone else?
Sounds like great fun.
Agreed with you: sometime the best deal is the deal you did not take. On a smaller level, I had a drink with a former colleague the other day and he discussed 2 jobs he was looking into. Both turned out a no go. And from all experiences he learned a lot. Our conclusion was that the logo was the best result for him
good luck huntingView Comment
Financial Slacker says
Thanks ATL. It’s not a quick process, but hopefully it pays off in the end.View Comment
The Green Swan says
Sounds like an exciting process for your, and interesting how you have history with acquisitions through your prior employer. I’m sure that helps in screening potential targets. I’d love to hear updates in the future, best of luck!View Comment
Financial Slacker says
Thanks Green Swan. I’m working on a few more opportunities as we speak.View Comment