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September 21, 2020

Not all corporate acquisitions are large companies. Big corporations are often acquiring family-owned businesses looking for an exit for various reasons while providing strategic growth to the acquiring company. 

But acquiring private sellers aren’t always easy, which is why Isaac Lund, VP Corporate Development and M&A at National Express LLC, is here to teach us how to work effectively with private sellers. 

“Continue to remind yourself that this is an emotional process as much as anything else for the seller, I think it will help make the process go smoother.” - Isaac Lund

Working with Private Sellers

One of the things that differentiate working with private sellers is that they lack the fundamental knowledge of selling a business. They don’t know how the process works, how to evaluate the business properly, and most of the time, they are very emotional, letting the company go. And if you think all of these things will make the deal easier or favorable for you? You’re sadly mistaken. 

Because of the reasons stated above, private sellers tend to price their company a lot higher than its actual worth. They have a lot of pride about what they have built; they lack the education on multiples of EBITDA, and the emotion that ties with the business inflate their price expectations.

Working with a Banker

If the seller is incapable of closing the deal independently, you can recommend getting a broker. Working with a broker tends to be more organized, but the deal’s price will most likely be higher. They know what they’re doing, so negotiations will enter a higher level, and they will help prepare the seller for what’s coming next. 

You would also want to negotiate fairly. It is in your best interest to keep the seller on your payroll, or at least have a good relationship with them after the deal is done. If they refuse to be a part of your company post-deal, try hard to get them on a consulting agreement even for six months to a year. They will be your best change agent in the transition because of their existing relationship with the employees. 

Show Empathy

The best approach to working with private sellers is to show empathy. This will be an emotional process for them because most of the time, these are family businesses that have been running for generations and its interwoven in their daily lives. Showing empathy will help make the process go smoother. And will give you a better chance of having a more positive value creation outcome.

Advice for Sellers

On the other hand, if you are a seller yourself, it is highly recommended that you get good representation. In most cases, the CPA who put your taxes together for the last 20 years wouldn’t suffice. Find someone who can prepare you for valuation and someone you can talk to about emotional conversations and can prepare you for diligence.  

Lastly, find a good M&A attorney. A family attorney wouldn’t work because, most likely, they have never seen a Sales and Purchase Agreement, they wouldn’t understand the workings of reps and warranties, and they don't understand the burden of preparing schedules for the SPA.


Working with a private seller has its challenges. But with the right amount of empathy and respect for what the owners have built, you can make the negotiation and the entire deal much more comfortable. After all, you would want the seller to stay in the company to work for you. 

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