A time-honored truth for the M&A industry is the importance of securing the advice and guidance of experienced professionals in this field. Many business owners do not initially understand how much goes into this process. That is why we host complimentary executive conferences across the country, which offer a helpful overview. Indeed, numerous owners we’ve met in the past who sold their companies without professional guidance have said how they wished they had the kind of support Generational Equity provides when selling a company.
The reason for this is simple: the knowledge that you are working with an advisory firm convinces buyers they may need to pay a premium for your business.
An M&A consultancy firm for business owners looking to sell is like the navigator on a ship. They help you reach your destination as quickly and smoothly as possible, all with the aim of discovering your ‘treasure’: the optimal value for your company.
On your journey, your professional team will help you navigate every stage, including the subject of this piece: a limited auction. A limited auction (also known as a targeted or controlled auction) plays a pivotal role in maximizing the value of your business among buyers, and helps to identify the ideal buyer for your company going forward.
So, what is a limited auction? As Divestopedia notes:
“A [limited] auction is a process which focuses on a limited amount of bidders for an acquisition of a company… A targeted auction weeds out buyers that are not a fit quickly compared to a broad auction which approaches all potential buyers in the market regardless of fit.”
Therefore, once your company is ready for sale (the end goal of our process to build a ‘buyer-ready’ business), our dealmakers at Generational Equity will setup a limited auction, creating a competitive bidding environment that will invariably increase your company value. Generating this atmosphere in front of carefully-selected strategic and/or financial buyers will instantly make your business more sought-after.
A limited auction is not the only sales process available to those selling their business: there are also broad auctions (which have a large volume of bidders) and targeted solicitation (approaching a smaller group of buyers). While all three have advantages and disadvantages, there is a reason why limited auctions are the preferred approach in middle-market M&A. That is because it provides the best overall solution to the following concerns:
For instance, a broad auction places your business in front of more prospective buyers. But, this is more likely to compromise the confidentiality of your company’s status. On the other hand, targeted solicitation is significantly more confidential, but no competition means you are unlikely to secure the optimal price for your business.
A limited auction offers the best of both worlds, and is the ideal approach to securing the right deal for your business. Your business is presented to a reasonably small but highly interested group of buyers, you minimize the risk of confidentiality, and improve your odds of identifying the right buyer in the shortest time.
This is especially true if you are working with skilled professionals, like our team at Generational Equity.
Because setting up a successful limited auction relies on two important details:
Our approach covers both considerations. Our comprehensive valuation process and regular communication with clients ensures that we know what they are looking for, which determines the buyers we include in the auction. In addition, thanks to our extensive database of over 34,000 business buyers, we have the resources to identify what buyers will be the best fit for your company.
We maintain a strong relationship with buyers through DealForce, our proprietary, effective middle-market portfolio of businesses across a broad range of industries. And, thanks to our reputation in this market, when buyers learn you are working with us, they are inclined to increase their bids compared to what they would offer if you were approaching this alone. Even the illusion of a limited auction can be a powerful tool in securing the best deal for your company.
If you’d like to discover more about limited auctions and other elements of our dedicated M&A process, attend one of our executive conferences. Here, we discuss how to develop a successful exit strategy, from an initial valuation and enhancement techniques, all the way to deal closure. In addition, you can discuss your goals with our experienced professionals, who are keen to learn more about your business and where you see yourself in five years, ten years and beyond.
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!JoAnn Ellis, Owner of Fondren 5 Star Kennels
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.Betty L. Brennan, President, Taylor Studios
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward. P.S. Given my experience with GE I felt comfortable enough to sign up with Generation Wealth Advisors!Tom Currier, Former President & CEO, Rackmount Solutions
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.Bryan D. Horn, Owner, Over Under Clothing
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.JoAnn Ellis, Owner of Fondren 5 Star Kennels
After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.Caroline Connelly, CEO, OptoTest
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.Shane and Johanna Kline, Owners of Vision Upfitters
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
We had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.Rick Greene of Dobbs Equity Partners LLC
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.Robert Evans, President and CEO of Mealtracker Dietary Software
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.Salvo Stoch, Founder and CEO of Sleeping Partners
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!Eric Erlandson, Owner, Action Fastenings, Inc.
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
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