This is the first in a series of articles exploring the evolving M&A landscape. In this piece, we focus on the sell-side perspective—helping founders and executives understand how to position their company for a successful acquisition.

By: Ronan Kennedy

 

When Should a Company Start Preparing for M&A?

Mergers and acquisitions (M&A) should always be a core consideration in an executive team’s strategic planning process. As the old saying goes, “It’s better to be bought than sold.”

Even if you aren’t actively seeking to sell, being prepared ensures that when an opportunity arises, leadership can act swiftly and strategically to assess the situation and respond in a way that maximizes value capture. While plans rarely unfold exactly as expected, the act of planning itself is invaluable – ensuring a foundation is in place when the right moment comes.

Anticipating potential scenarios allows founders to stay in control, understand the levers available to them, and shape the outcome on their terms. Knowing your source of value to the acquiror helps with positioning, negotiating, and structuring any potential transaction.

Future articles in this series will explore M&A from the buy-side perspective, but this article focuses on the essential steps a company should take when preparing to sell.

 

Preparing for M&A as a Seller

1. Understanding Your Buyer Base

The first step in preparing for an acquisition is identifying the world of potential buyers and understanding their motivations. A well-defined and diverse buyer base increases the likelihood of securing an optimal deal. Different buyers will have distinct reasons for exploring acquisitions with you, which will influence how they value your company.

• Buyers seeking cross-sell and upsell opportunities aim to integrate your offerings into their customer base and their offerings into your customer base.
• Revenue-focused acquirers prioritize your revenue stream to boost financial performance and market share.
• Technology-driven buyers may be looking for innovation to modernize legacy systems and drive business model transformation.
• Market expansion buyers see your company as a strategic entry point into new regions or sectors.

By understanding these different motivations, you can assess where your company’s highest source of value may lay. With that understanding, management teams can then tailor their relationships, operations, positioning, and projections to align with the desires of the strongest potential acquirers.

2. Crafting Your Narrative

Once you have identified the potential buyer landscape, the next step is shaping a compelling narrative that connects your company’s current state to what potential buyers need. This could involve:

• Clear articulation of market positioning in a way that aligns with buyers’ strategic goals, ensuring they see the value in an acquisition.
• Highlighting key value propositions that make your company an attractive asset.
• Structuring historical and projected financials in a manner that is consistent with how acquirer will assess you, ensuring they can easily assess the return on investment.

Your acquirers may calculate financial and operational metrics using a different methodology than your own. Some acquirers expect to see synergies in one year, others in two or three years.

A well-articulated narrative not only increases your appeal but also influences valuation, deal structure and the speed at which negotiations progress. It also increases your personal value to the acquiror, demonstrating your understanding of the combined vision together, and therefore your role in any transaction’s success.

3. Strengthening Relationships Before the Deal

Successful M&A is not just about financials – it is also about relationships, strategic alignment and trust. Establishing relationships at the right levels within potential acquirers is crucial to ensuring a smooth transaction.

Before engaging in formal deal discussions, it is essential to align on:

• Shared values, culture and long-term vision to ensure a seamless integration post-transaction.
• A common understanding of industry challenges and how an acquisition can create mutual benefits.
• Synergies that make the acquisition logical, enabling both parties to leverage combined strengths.

Startups can proactively build relationships with potential buyers early on through commercial and technical partnerships, servicing common customers, and other engagements. This fosters familiarity before formal discussions even begin. Establishing these connections and aligning on strategic fit early can streamline negotiations and improve the chances of a successful deal.

4. Structuring the Deal and Pricing Considerations

Once alignment is established, structuring the financial aspects of the deal becomes a key focus. Pricing an M&A transaction extends beyond the purchase price—it involves three fundamental components:

• Business purchase terms – Understanding what’s being purchased, the value of the purchase, and structure of payment (including earnouts)
• Employment agreements – Outlining how key executives and employees will be incentivized post-acquisition to ensure continuity and smooth integration.
• Intangible factors – Assessing elements like cultural fit, brand equity and autonomy plays a critical role in negotiations, valuation, and the transaction’s success.

Founders should take a holistic approach to optimizing value across these dimensions, ensuring that stakeholders are aligned and the business is positioned for a strong outcome.

 

Proactivity vs. Waiting to Be Bought

The most successful acquisitions occur when a company is strategically positioned to be bought—not when it is forced to sell. Proactive M&A conversations often serve as a positive signal to future investors, illustrating a path to liquidity and the sophistication of the management team.

To position your company for an acquisition:

• Actively engage with potential acquirers and strategic partners to create multiple options.
• Maintain flexibility and optionality—you can always decline an offer or choose to wait for a better time.
• Have a proactive strategy for responding to competitive pressures, including scenarios where your competitors are acquired before you.
• Operate with a long-term vision, running the business in a way that naturally aligns with the interests of potential buyers.

A well-executed exit strategy starts with a structured plan, strong relationships, and an operational approach that aligns with what acquirers seek in a target company.

 

How We Support Our Portfolio Companies

Navigating an M&A process requires deep expertise, a strong network and strategic foresight. At B Capital, our dedicated Capital Advisory team works closely with companies to help them:

• Develop a structured M&A roadmap and identify potential acquirers with the highest strategic fit.
• Translate their value into language that resonates with buyers and maximizes positioning.
• Assist with introductions and backchannel discussions that help move negotiations forward.
• Provide guidance on industry-standard deal structures and financial considerations to ensure an optimal outcome.
• Help founders understand key valuation drivers, including pro forma financials, earn-out structures, synergy attribution and realization, and successful integration planning.
• Evaluate if hiring an advisor/banker would help or hurt a transaction

With our deep industry expertise and global network, we empower founders to confidently approach M&A opportunities, ensuring that when the time comes, they are well-prepared to maximize value and achieve a successful outcome.

 

 

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LEGAL DISCLAIMER
All information is as of 4.1.25 and subject to change. Certain statements reflected herein reflect the subjective opinions and views of B Capital personnel. Such statements cannot be independently verified and are subject to change. Reference to third-party firms or businesses does not imply affiliation with or endorsement by such firms or businesses. It should not be assumed that any investments or companies identified and discussed herein were or will be profitable. Past performance is not indicative of future results. The information herein does not constitute or form part of an offer to issue or sell, or a solicitation of an offer to subscribe or buy, any securities or other financial instruments, nor does it constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. Much of the relevant information is derived directly from various sources which B Capital believes to be reliable, but without independent verification. This information is provided for reference only and the companies described herein may not be representative of all relevant companies or B Capital investments. You should not rely upon this information to form the definitive basis for any decision, contract, commitment or action.

For the avoidance of doubt, the above information is for reference only and B Capital is not providing broker dealer services to any other party in any potential transaction.