One Buyer or Many: A Family's Choice on Selling the Business

The situation

Alejandro built a Toronto manufacturing and distribution business over three decades and, after retiring from day-to-day operations, still held the largest block of shares. His two adult children held the rest between them: Andre, who worked as a technology executive at a large company and had a sharp instinct for negotiation leverage, and Marcia, who had stepped back from an operating role in the business itself but remained closely involved as a shareholder. Together the three of them owned all of the company, and together they had to agree on what to do when a buyer came calling.

The buyer was a private equity-backed strategic acquirer that had approached the family directly, unsolicited, with a written expression of interest. After several months of informal conversation and a management presentation, the buyer put forward a non-binding letter of intent — a short document setting out the price and key terms it was prepared to offer, without yet committing either side to the deal. The number in that letter valued the business, on an enterprise basis, at roughly $58 million.

That figure was real money for all three shareholders, and it triggered the family's first serious disagreement about how to sell.

The disagreement

Alejandro wanted to take the offer and move toward a negotiated deal with that one buyer. He had been through two near-sales in earlier years that fell apart during long, drawn-out processes, and he valued certainty and speed over squeezing out every possible dollar. At his stage of life, a clean transaction with a buyer who had already shown real interest looked like the right outcome.

Andre disagreed. He argued that one offer, however serious, was not evidence of the business's true value — it was evidence of what one buyer was willing to say before any competitive pressure existed. A formal auction process, where the business is marketed to a curated list of potential buyers who bid against each other on price and terms, routinely produces materially better outcomes than negotiating with a single party. He had seen it happen at companies he worked with professionally.

Marcia sat between the two positions. She was less concerned with maximizing price than with keeping the family relationship intact through the sale, and she worried that a long, adversarial auction process — with confidential financial information circulating to multiple outside parties, management distracted from running the business, and a real chance the deal fell through after months of work — carried its own costs that a single-buyer negotiation would avoid.

All three were shareholders under a unanimous shareholder agreement that required agreement among them on a sale of substantially all of the company's assets or shares, so no one could simply outvote the others. The family needed a process they could all live with, not just a price.

What we did

1. Reframed the choice as a spectrum, not a binary. A full-blown auction with dozens of invited bidders was one end of the spectrum; quietly accepting the first offer was the other. Between them sat a limited or targeted process — approaching a small number of credible, pre-qualified buyers alongside the one who had already come forward, under strict confidentiality, without the scale, cost, or public exposure of a full auction. We walked the family through what each option would likely cost in time, in advisor and legal fees, and in the risk of the deal collapsing, so the decision was made on real trade-offs rather than instinct alone.
2. Advised against exclusivity before value was tested. The original buyer's letter of intent asked the family to agree to a period of exclusivity — a window during which the sellers would not negotiate with, or even talk to, anyone else. Signing that immediately would have locked in Alejandro's preferred path before Andre's concerns about price could be tested at all. We negotiated a short delay before granting exclusivity, preserving the family's ability to approach other parties first.
3. Ran a controlled, confidential outreach. With the family's agreement, we identified four additional strategic and financial buyers likely to have genuine interest in a business of this size and sector, each of whom signed a confidentiality agreement before receiving any financial information. This was not a broad marketing campaign; it was a deliberately narrow list, kept small enough to protect the confidentiality the family valued and fast enough to avoid the months-long timeline of a full auction.
4. Used the resulting interest as leverage, not as a second track. Two of the four additional parties responded with real interest, including one preliminary indication above the original buyer's number. Rather than running a parallel negotiation with multiple bidders through to signing — which would have meant the long, resource-intensive process Marcia and Alejandro both wanted to avoid — we brought that competitive tension back to the original buyer directly, disclosing that other serious interest existed without naming the other parties or the specific figures involved.
5. Renegotiated price and terms with the original buyer. Faced with the credible risk of losing the deal, the original buyer improved its offer. We also used the negotiation to tighten terms that mattered to the family beyond price: a shorter period during which a portion of the purchase price would sit in escrow pending resolution of any post-closing claims, and firmer commitments on continued employment for several long-serving members of the management team, a point Alejandro cared about personally.
6. Negotiated the purchase agreement and closed within the family's timeline. Once terms were agreed, our team negotiated the definitive share purchase agreement, including the scope of the seller's representations and warranties — the contractual promises about the state of the business that, if untrue, can expose the sellers to claims after closing — and coordinated due diligence so the deal closed within roughly five months of the original letter of intent, well inside what a full auction would typically have required.

The outcome

The final purchase price came in at roughly $69 million on an enterprise basis, an increase of about $11 million, or roughly nineteen percent, over the original buyer's opening figure. That improvement came directly from testing the market on a limited, controlled basis rather than either accepting the first number or running a full competitive auction.

It was, honestly, a partial win rather than an unqualified one. Andre's instinct that the first offer undervalued the business was proven right, and the limited process delivered real additional value. But it did not deliver what a full auction with a longer timeline and a wider buyer pool might have produced; the two other interested parties were never given the opportunity to compete all the way through a formal bidding process, and it is possible, though impossible to know for certain, that a longer process would have pushed the price higher still. Alejandro got the shorter timeline and management continuity commitments he wanted. Marcia got a process that kept the family working together rather than split into camps through months of competing advisors. Andre got confirmation that the price was tested, even if not tested as far as he might have preferred.

The deal closed with all three shareholders in agreement, the escrow later released in full with no post-closing claims made against it, and the family relationship that Marcia had worried about intact through a transaction that, for a period, genuinely threatened it.

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