Why Running a Competitive M&A Process Matters

When it comes to selling a business, how you run the process can significantly impact the final outcome. One of the most important — and often overlooked — strategies is running a competitive M&A process. Whether you're selling a company in Arizona, Scottsdale, Phoenix, or anywhere across the U.S., creating a competitive environment among potential buyers can drive higher valuations, better terms, and faster closings.

This post outlines why a competitive sale process matters, how it works, and what business owners should expect when working with an investment banking team to manage it effectively.

1. What Is a Competitive M&A Process?

A competitive M&A process involves soliciting interest from multiple qualified buyers—including strategic acquirers, private equity firms, and family offices—under controlled, confidential conditions. The goal is to:

• Maximize purchase price and deal terms

• Create bidding tension among interested parties

• Preserve the seller’s leverage during negotiations

• Ensure alignment with the seller’s strategic, financial, and personal goals

This process is typically run by investment bankers, not business brokers, due to the level of complexity, buyer access, and strategic guidance required.

2. Why a Competitive Process Leads to Better Outcomes

A. Drives Up Business Valuation

When multiple buyers are aware they’re in a competitive environment, they’re more likely to put forward stronger offers to stand out. This often results in:

• Higher enterprise value or purchase price

• Favorable deal structures (e.g., less reliance on earnouts)

• Multiple options to choose from — giving sellers negotiating power

B. Creates Leverage in Negotiations

A competitive process gives the seller control of the timeline and terms. Buyers are less likely to ask for aggressive concessions when they know other parties are involved.

This benefits the seller in areas such as:

• Working capital adjustments

• Reps & warranties

• Post-close obligations

• Earnout structure or seller rollovers

C. Uncovers the Best-Fit Buyer

A wider pool of buyers improves the odds of finding not just the highest offer, but the right strategic or cultural fit—whether the priority is valuation, employee retention, or legacy.

3. What Sellers Can Expect in a Competitive M&A Process

Running a competitive process requires a thoughtful, strategic approach. A typical engagement with an investment banker includes:

Pre-Marketing Preparation

• Detailed financial and operational diligence

• Creation of a Confidential Information Memorandum (CIM)

• Buyer list development (strategic + financial sponsors)

• NDA and process letter preparation

Go-to-Market Strategy

• Confidential outreach to targeted buyers

• Coordinated management meetings and Q&A

• Evaluation of Indications of Interest (IOIs)

Negotiation & Deal Selection

• Compare offers based on valuation and terms

• Use leverage to push selected buyers to improve

• Structure final LOI with favorable terms for the seller

4. The Risks of a Non-Competitive Sale Process

Some owners opt for one-off negotiations with a single buyer, usually due to a direct approach or longstanding relationship. While this may seem easier, it often leads to:

• Lower valuation due to lack of competitive pressure

• Terms that favor the buyer

• Higher risk of retrading (price being reduced mid-process)

• Less certainty of closing

Without leverage, sellers have fewer options and limited control—especially if the buyer delays, revalues, or walks away.

5. Why Investment Bankers (Not Business Brokers) Run Competitive Processes

Business brokers typically list businesses publicly and work with individual buyers. In contrast, investment bankers run confidential, curated processes targeting qualified strategic and institutional buyers.

This is critical for middle-market businesses seeking:

• Professional corporate valuation

• Sophisticated deal structuring

• Access to private equity, family offices, and industry acquirers

• Discreet outreach and protection of sensitive information

Final Thoughts

Running a competitive M&A process is the most effective way to unlock maximum value when selling your company. With the right preparation, guidance, and buyer outreach, business owners can secure higher valuations, better terms, and stronger outcomes.

If you're planning to sell your business in Arizona, William & Wall offers expert M&A advisory services, tailored to ensure a competitive, confidential, and strategic process from start to finish.

Contact us today to explore your exit options and learn how we help sellers run a professional M&A process that delivers results.