Preempt the Broker Process

searcher profile

December 07, 2021

by a searcher from The University of Texas at Austin - Red McCombs School of Business in Dallas, TX, USA

Talking to a company that has engaged a broker, and the broker is going to start a formal process next month. We would like to move faster and increase our odds, so evaluating giving the broker an offer to preempt. Curious what experiences people have had, and the different ways the broker can look at this?

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Reply by an intermediary
from Columbia University in Louisville, KY, USA
make the broker's job easier so they can advise their client to go with your preemptive deal now vs wait and see what a broader marketed process might offer. Things to consider:
- premium valuation with a seller friendly structure
- clearly stated diligence plan and anticipated timeline to close
- any pre-read you might be able to provide on financing that would give confidence you can actually close

How much you lean into point #1 should reflect how much you want the business and how competitive you expect a marketed process to be otherwise.

Points #2 and #3 go right to speed and certainty, which are often the most important factors if your price and structure are in market range.
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