Advice on Handling a Potential Supplier Acquisition?
November 24, 2025
by a searcher from Ryerson University - Ted Rogers School of Management in Toronto, ON, Canada
Hi all — I did not go into my search intending to buy a plant or a manufacturing facility. But due to some recent developments, I discovered (indirectly) that a key supplier from my operating ecom brand may be exploring a sale.
(I saw a teaser, signed NDA, broker did _not_ send CIM but sent me some pre-qualification questions first, from which i realized that the target is ...my supplier!)
This puts me in a tricky position as a potential strategic buyer:
On one hand, acquiring the supplier could de-risk my supply chain, improve margins, and give me long-term control over production.
On the other hand, it’s a labor-intensive, onsite manufacturing operation (20+ employees, rural location), and it's barely profitable (less than 10% SDE margin)
There’s also the question of seller expectations — the broker is anchoring at a very high multiple for the size and industry (he said seller wants 10X SDE) and that a relocation is a must. (From the way the current owner conducted business with me, it is obvious that he runs everything)
And I have to be very careful not to disclose that I am a current customer or dependent on them, to avoid weakening my negotiation position.
My dilemma:
WTF do I do in this situation? It's one of my key suppliers and if they sell, new ownership might not bother with my business (it's a tiny fraction of their overall rev). Not deadly, but will sting.
And pursuing this deal with this type of seller and this thin of a profit margin also looks risky.
(Not to mention how to navigate the NDA i signed with the broker vs. my existing supplier relationship)
Any advice, frameworks, or cautionary tales from the community would be hugely appreciated.
Feel free to comment publicly or DM if you’ve gone through something similar.
Thanks in advance.
from Charter Oak State College in New York, NY, USA
from Emory University in Tucson, AZ, USA