What happens on the initial call with the sellers ?

The initial meeting with the sellers (and their advisers) is essentially a “get to know you” type meeting and, these days, is likely to be held via a video platform such as Teams or Zoom. Ahead of a call with the sellers, you will likely be asked for an agenda. 

The agenda

This is easy to construct. For example, the agenda might look something like the following:

• You, the buyer – Introduction about yourself and your background and why you’re interested in the business for sale
• The company for sale – quick overview of the business, it’s structure and team/key people
• Roles of the shareholders and how much time each spends in the business day to day
• Current business profile including activity levels
• Review of historic financials
• Management accounts – progress to date in the current financial year
• Owners thoughts on timeframes / roles post sale / handover / retention of equity on sale, etc
• Next steps

The call itself with the existing owners

This first call is the buyer’s chance to talk directly to the owners of the business and carry out a general fact find asking questions on specific areas of the business operations, key staff, financials, customers, suppliers, etc. However, questions about valuation are normally off the table at such an early stage. If the sellers advisers are on the call then this is highly likely be the case however, if they are not, you might broach the subject and see what sort of reaction you receive. The sellers are more than likely to refer you back to the advisers for that sort of discussion but it’s always worth a check to see if anything can be gleaned in this respect. The call should last between 45 minutes to 90 minutes. You should treat the call as a conversation rather than having to stick rigidly to the agenda,  and feel free to return to earlier items which need further clarification as required. The call is intended to build rapport with the sellers in order that they see you as a credible, knowledgeable and interested buyer and wish to progress further discussions with you to the next stage in the process.

After the initial discussion, if you’re keen to pursue matters, you will likely wish to request further information, particularly financial information including management accounts which are normally reserved by the sell side advisers for release after the initial call.

Do I need a corporate financier on the first call with the sellers ?

No, this is not necessary. The first meeting is essentially a fact find and an assessment of what you think of the business and it’s owners. It should be a fairly straightforward conversation. A corporate financier can be found at a later stage.

There is a separate article on the role of a corporate financier available as a blog post from Valius.