M&A Market: Staying the Course – What Are Sellers Really Looking for in a Deal?

When it comes to M&A transactions, understanding seller goals is key for buyers who want to make a compelling bid. For M&A advisors like us, managing a deal involves balancing a lot of moving pieces—especially in an auction process where competition is high. We need to dive into the details while keeping an eye on the bigger picture: our clients’ strategic goals.

So, what exactly are sellers looking for? If buyers can meet these goals, they’ll stand a better chance of closing the deal. According to the Alliance of M&A Advisors M&A Market Study Report from earlier this year, here’s what matters most to sellers, ranked in order of importance:

1. Cash at Closing
   This is the top priority for most sellers. Buyers who can offer a substantial upfront cash payment will always get noticed.

2. Total Sale Price
   While cash at closing takes the top spot, sellers also care about the overall sale price, including any non-cash considerations such as earnouts or equity.

3. Post-Closing Security for Employees
   Sellers often want to ensure their employees are taken care of after the transaction. Buyers who can provide job security and opportunities for growth will have an edge.

4. Preserving Legacy and Culture
   Many sellers have spent years building a business, so preserving the company’s legacy and culture post-sale is a significant factor.

5. A Role for the Seller After the Sale
   Some sellers wish to stay involved with the business in a limited capacity. Buyers who can offer a meaningful post-closing role, such as an advisory position, may appeal to sellers with this goal.

6. Upside Potential
   Finally, some sellers are motivated by the potential for future growth or upside, which may come in the form of stock options or earnouts tied to the company's performance.

The Bottom Line: For buyers, understanding these key seller goals can make all the difference when trying to win a deal. Cash is king, but addressing other factors like employee security, culture preservation, and offering a role post-sale can make a bid even more attractive.