Someone Wants to Buy My Business:
How to Evaluate an Unsolicited Offer (2026)

What it means when someone offers to buy your business

An unsolicited acquisition offer proposes buying part or all of your company. An initial inquiry may only ask whether you would consider a sale, without stating a price or other material terms. A strategic buyer may see value in your customers, capabilities, or geographic reach. A private equity firm, family office, or independent sponsor may view your company as an investment or as an addition to an existing business.

Not every inquiry represents a specific, funded proposal. An intermediary may be asking whether you would consider selling before identifying a specific buyer. A competitor may have genuine acquisition interest, but access to financial, customer, or operational information could also serve its competitive interests. Generic outreach can test the market without representing a funded proposal.

The opening message rarely proves whether the buyer is serious. You need to establish who authorized the approach and why the buyer wants your company. You also need evidence that the buyer can fund a transaction before releasing sensitive information.

Your response should reflect the buyer’s credibility and the proposed economics. Your willingness and readiness to sell also shape the appropriate response. Consider whether a sale fits your financial goals, priorities for employees and family members, as well as your preferred role after closing. Based on the buyer’s credibility, the offer terms, and your sale objectives, you may reject the approach, negotiate directly, test interest among a limited group of buyers, or run a broader sale process.

Your first-response checklist

Your initial response should preserve your options. Do not begin negotiating until you have verified the buyer and reviewed the proposal.

• Acknowledge the inquiry without discussing price. Confirm that you received the message and provide a reasonable date for your response. Avoid indicating what valuation or terms you might accept.
• Document what the buyer has presented. Save the original message and record any stated price, structure, deadline, financing plan, or conditions. Separate firm terms from informal suggestions.
• Keep the inquiry within a small internal group. Premature disclosure can unsettle employees and affect customer or supplier relationships. Include only people who need to help evaluate the approach.
• Identify the actual buyer. Ask for the buyer’s legal name, acquisition rationale, and decision-maker. When an intermediary makes contact, ask whom the intermediary represents and whether the buyer authorized the outreach.
• Request a written outline of the proposal. Ask the buyer to distinguish total potential consideration from cash payable at closing. The buyer should also identify any earnout, rollover equity, seller financing, or continued employment requirement.
• Withhold sensitive information until safeguards are in place. Do not send customer lists, detailed margins, tax returns, or proprietary materials in response to an introductory email. A staged sale process typically requires buyer qualification and a signed nondisclosure agreement before the seller shares detailed information.
• Ask what creates any stated deadline. Genuine timing constraints may involve board approval, financing, or another transaction under consideration. A credible buyer should explain the event behind the deadline and what changes if it passes. Specific constraints deserve a different response than vague pressure.
• Keep running the business. Weakening performance can reduce negotiating power or give the buyer a reason to revise its proposal. Initial discussions should not distract you from customers and employees.
• Bring in advisors before sharing more information or signing anything. An M&A advisor can assess value and buyer credibility, while an attorney can review confidentiality terms and legal obligations. Your accountant or tax advisor can identify financial and tax consequences before negotiations advance.

Verifying the buyer and the intermediary

Verify the buyer’s identity, authority, and ability to close before sharing sensitive information. A credible buyer should answer basic questions and support important claims with documents.

Ask the buyer the following questions.

• What is the buyer’s full legal name, ownership structure, and business address?
• Who makes the final acquisition decision, and who must approve the transaction?
• Why does the buyer want your company, and how does the acquisition fit its strategy?
• How will the buyer fund the purchase?
• Can the buyer provide proof of funds, financing documentation, or financial statements that support its capacity?
• Which acquisitions has the buyer completed, and may you speak with prior sellers?
• Has the buyer withdrawn from signed deals? If so, what prevented those transactions from closing?
• Does the buyer compete with you or have relationships that could create a confidentiality concern?

Match the evidence to the buyer. An individual buyer may provide bank documentation or a lender letter. A private equity firm may identify the fund making the investment, the equity available for the acquisition, and any outside financing it expects to use. A corporate buyer may provide financial statements and explain its internal approval process. If the buyer refuses to document its financing capacity or acquisition history, pause discussions until you can verify its claims.

An intermediary adds another layer to the review. Ask who the actual buyer is, whether the intermediary has authority to speak for that buyer, and who pays the intermediary. A buyer-side advisor represents the acquirer, so the advisor does not provide independent advice to you.

Also ask whether the intermediary represents other buyers, provides financing, or expects another fee if the deal closes. Request written confirmation of its mandate and identify every party that may receive your information. An intermediary that cannot identify its client or explain its authority should not receive confidential records.

References can reveal how a buyer behaves after signing a letter of intent. Ask prior sellers whether the buyer changed price or terms during diligence, met agreed deadlines, and handled sensitive information appropriately. Buyer-screening guidance recommends testing economic seriousness and industry fit early rather than assuming an inbound buyer is qualified.

Protecting confidentiality while you evaluate

Staged disclosure lets you evaluate an unsolicited approach without exposing sensitive information too early. A confidential sale process releases more information as the buyer provides evidence of its credibility, financing capacity, and commitment.

1. Initial qualification. Confirm the buyer’s legal identity, acquisition rationale, authority, financing plan, and relevant transaction history. If an intermediary initiated the contact, verify whom it represents before sharing company information.
2. NDA and summary information. Require a signed nondisclosure agreement before providing nonpublic financial or operational information. Begin with high-level financial results and a general business overview rather than customer-level data or proprietary materials.
3. Detailed review. After qualification, provide historical financial statements and the operating records needed to evaluate the proposal. Continue to withhold competitively sensitive information unless the buyer has a legitimate diligence need.
4. Controlled data room. Release supporting documents after the buyer provides a credible written proposal or letter of intent. Grant access in stages, track downloads, and restrict highly sensitive records until they are necessary for diligence.

Your attorney should tailor the NDA to the situation. The agreement should limit information use to evaluating the acquisition and restrict sharing to specified representatives, financing sources, and professional advisors who need the information to evaluate the transaction. It may also address employee or customer solicitation and require the buyer to keep the potential transaction confidential.

Internal disclosure needs similar discipline. Premature sale rumors can cause employees to seek other jobs, customers to delay decisions, or suppliers to reconsider terms. Confidentiality guidance for business sales recommends deciding in advance which employees need to know and when they should learn about the process.

Share customer contracts, employee records, and proprietary procedures only when diligence requires them. Redactions, watermarks, access logs, and per-user permissions help you control distribution. Sign the NDA before disclosing information that a buyer could use competitively or that could weaken your negotiating position.

Getting an independent view of value

An unsolicited offer reflects one buyer’s assumptions, priorities, and expected return. It does not establish a market price, although the offer may still be attractive. A buyer that expects cost savings or added revenue may value your company differently than a buyer that plans to operate it independently.

Build an independent value range before negotiating the headline number. Start by reviewing historical results and forecasts, then calculate normalized earnings and test the valuation multiples or other assumptions applied to those earnings. Adjusted EBITDA starts with earnings before interest, taxes, depreciation, and amortization, then adjusts for defensible owner-related, nonrecurring, or nonoperating items. Third-party valuation input can help test those adjustments and the assumptions behind your projections.

Your analysis should also consider customer concentration, recurring revenue, growth, management depth, and dependence on the owner. Recent transactions involving sufficiently similar companies can provide another reference point, but differences in size, growth, risk, and strategic fit may support different valuation multiples. Identifying buyers with strategic reasons for an acquisition can help explain why one buyer might support a higher value than another.

Salt Creek’s valuation tool provides a directional starting range based on industry transaction ranges and company-specific inputs. Salt Creek’s directional range is not a formal valuation, fairness opinion, or acquisition offer. A detailed review of your financial and operational information may produce a different range.

Before comparing that range with the offer, confirm what the buyer’s number represents. Enterprise value measures the value assigned to the operating business. Equity value reflects what remains for the owners after debt and other adjustments. Cash proceeds at closing may be lower still because some consideration may be withheld, deferred, or contingent.

How the headline price differs from cash at closing

An acquisition offer may state enterprise value rather than the amount you will receive at closing. Buyers commonly assume a cash-free, debt-free transaction with a normal level of working capital. The equity value calculation then adds any agreed surplus cash and subtracts debt, preferred claims, and other specified liabilities. Enterprise value adjustments can materially reduce the amount attributable to owners.

Debt-like items create another layer of negotiation. Buyers may seek deductions for accrued bonuses, unpaid transaction costs, deferred obligations, or certain legal liabilities. Your advisors should confirm that each item fits the agreed definition and has not already reduced value through working capital or another adjustment.

For purchase-price adjustments, working capital generally includes the current operating assets and liabilities that transfer with the business, usually excluding cash and debt. The parties negotiate a target called a working capital peg. If closing working capital falls below that target, the buyer generally reduces the purchase price. A surplus may increase it, depending on the agreement. Working capital true-ups often continue after closing when the parties finalize the closing balance sheet.

Escrows and holdbacks further reduce immediate proceeds. An escrow places part of the purchase price with an independent holder to cover defined claims or adjustments. A holdback leaves the money with the buyer, which adds buyer credit risk. The agreement should specify permitted claims, release dates, dispute procedures, and whether unresolved claims can delay the full release. Escrows and holdbacks can produce different risks even when the withheld amounts match.

Transaction expenses also come out of seller proceeds. Legal fees, accounting fees, advisory fees, sale bonuses, and related payroll taxes may appear in the final funds flow. Clear definitions help the seller and buyer assign each transaction expense to one category, which prevents duplicate deductions in the final funds flow.

Deferred consideration does not arrive at closing. Earnouts depend on future performance, seller notes depend on the buyer’s ability to repay, and rollover equity depends on the value of the buyer or combined company at a later exit. Buyers may include these amounts in total potential consideration, but you should separate each amount by timing and risk.

Consider a hypothetical $20 million enterprise value offer. If the agreement deducts $3 million of debt and debt-like items and includes a $500,000 downward working capital adjustment, the implied equity value falls to $16.5 million. A $1 million escrow, $400,000 of transaction expenses, and a $3 million earnout would leave $12.1 million of cash at closing before taxes.

Deal structure can materially change after-tax proceeds. Asset sales and equity sales may receive different tax treatment, while purchase-price allocations among assets, goodwill, restrictive covenants, and employment compensation can change the result. Ask a CPA or transaction tax advisor to model after-tax proceeds before you sign a letter of intent.

Reading the risk in earnouts, rollover equity, and seller notes

Deferred consideration leaves you exposed to payment, performance, or investment risk after closing. Two offers may each advertise $20 million of total potential consideration, but the offer with more cash at closing usually provides greater certainty.

An earnout depends on future performance. The buyer pays part of the purchase price only if the business reaches agreed targets after closing. Revenue or profit definitions, accounting choices, and the buyer’s operating decisions can affect whether you receive the payment. Review who controls the business during the earnout period and what happens if the buyer changes strategy or combines operations.

Rollover equity depends on a later transaction. You reinvest part of your sale proceeds in equity issued by the buyer, its parent company, or another acquisition entity. You may realize additional value if that equity later pays distributions or is sold in a recapitalization or exit. Rollover equity can appreciate, but it remains illiquid and may lose value. Review your ownership rights, dilution protections, reporting access, and treatment if you leave the business before a future exit.

A seller note makes you a lender to the buyer. The buyer promises to pay part of the price over time, so your recovery depends on its ability and willingness to repay. Review the interest rate and repayment schedule. You should also understand whether senior lenders receive payment first and what remedies you have after a default.

Salt Creek’s guide to comparing cash, earnouts, rollover equity, and seller notes explains the mechanics in greater depth. Compare each offer based on cash at closing, realistic expected proceeds, and the risks you retain after the sale.

Employment terms, consulting agreements, and noncompetes

Post-closing compensation should remain separate from the purchase price. A salary or consulting fee pays you for future work, while purchase consideration pays you for the company you already built. Combining both amounts can make an offer appear larger than its actual sale value.

Review the position you must accept and the authority you will retain. The agreement should define expected hours, travel, availability, and the length of your commitment. Examine termination rights closely because the buyer may be able to end your employment before you receive expected compensation. The agreement should also address unpaid compensation, benefits, reimbursable expenses, and ownership of work created after closing.

A noncompete should correspond to the business the buyer purchased. Fasthoff Law Firm’s transaction guidance recommends reviewing purchase consideration, service obligations, and restrictive covenants as one package. Your attorney should examine the restricted activities, covered geography, and duration under the governing law. The language should also preserve appropriate rights to make passive investments or work outside the sold company’s market.

Review how an alleged breach affects other payments. A buyer may seek the right to withhold an earnout or escrow funds if it claims you violated a noncompete or nonsolicitation clause. Broad withholding rights can expose unrelated sale proceeds to a dispute over your later conduct.

Purchase-price allocation can change your after-tax proceeds. Amounts allocated to goodwill, restrictive covenants, and post-closing compensation may receive different tax treatment, as explained in The Tax Adviser’s discussion of noncompete agreements. Ask transaction tax counsel or a qualified CPA to model the allocation before you sign a letter of intent or purchase agreement.

Financing certainty and closing conditions

A buyer’s ability to fund the acquisition affects the practical value of its offer. Before granting exclusivity, ask where the money will come from and which approvals remain outstanding.

Evidence should match the buyer. A corporate acquirer may support its offer with balance-sheet resources or a credit facility that permits acquisition financing. It should also identify any remaining board or other internal approvals. A private equity firm or independent sponsor may provide information about committed equity and lender support. An individual buyer or family office may need to provide proof of funds and documentation for any expected acquisition loan.

Ask whether debt financing is committed or still under discussion. Review lender commitment documents when available, including the conditions the lender can impose before funding. You should also identify any remaining investment committee, board, partner, or regulatory approvals.

Closing conditions deserve equal attention. Broad financing contingencies let a buyer withdraw if funding fails, while vague diligence conditions can extend the timeline without a clear endpoint. An offer provides greater closing certainty when the buyer identifies its funding sources, resolves required approvals, and limits diligence and financing conditions in the written terms. No document guarantees closing, but clearer evidence reduces uncertainty and makes financing certainty a distinct point of comparison alongside price and structure.

Offer terms compared: value, risk, control, and timing

A buyer’s headline price often reflects enterprise value rather than the equity value you receive after debt and other adjustments, as described in the IMAA guide to enterprise value and equity value. Compare each offer based on payment certainty, retained control, obligations, and timing.

Two offers with the same headline value can produce different proceeds and obligations. Compare guaranteed cash, contingent payments, retained exposure, and post-closing restrictions before choosing between them.

Understanding the letter of intent and exclusivity

A letter of intent records the principal business terms that the buyer and seller expect to carry into definitive purchase documents. An LOI commonly addresses price, payment structure, working capital, financing, due diligence, timing, and closing conditions. The LOI gives both sides a framework for continuing negotiations, but it usually does not require either side to complete the sale.

A document labeled “nonbinding” can still create immediate obligations. Commercial terms such as purchase price may remain nonbinding, while provisions covering confidentiality, expenses, information access, or exclusivity may bind one or both parties. The document’s title does not determine its legal effect, so an experienced M&A attorney should review the LOI before you sign it. Goosmann Law’s explanation of LOI terms describes how binding and nonbinding provisions can appear in the same document.

Exclusivity immediately limits an owner’s ability to seek or consider competing proposals. During the exclusivity period, you may be prohibited from contacting other buyers, sharing information with them, or considering competing proposals. The original buyer can then conduct diligence without competition. During that period, you may lose the ability to test whether another buyer would offer stronger terms.

Resolve the largest economic and control issues before granting exclusivity. The LOI should explain cash at closing, deferred consideration, working capital treatment, financing conditions, and any continuing role for you. Vague language can allow the buyer to revisit material terms after you have stopped speaking with alternatives.

Milestone-based exclusivity can let you end the restriction if the buyer misses agreed deadlines. For example, continued exclusivity might require the buyer to deliver a first purchase agreement draft, provide financing evidence, or complete specified diligence by agreed dates. Exclusivity can expire automatically when the buyer misses a milestone, and any extension can require your written approval. Seller-side LOI guidance explains how defined milestones and expiration conditions can preserve negotiating flexibility.

Set the exclusivity period based on diligence readiness, financing, required approvals, and document complexity. Your attorney should negotiate the language based on the transaction and the law governing the LOI.

Choosing your path: reject, negotiate, limited check, or full process

You have four legitimate responses to a credible acquisition offer. You can reject it, negotiate with the original buyer, conduct a limited market check, or run a full sale process. Your choice should reflect the buyer’s credibility, the strength of the proposed economics, your personal priorities, and the number of other buyers likely to show serious interest.

1. Reject the offer. Rejection may fit when you do not want to sell, the buyer cannot demonstrate funding or relevant experience, or the proposed terms fall well below a reasonable valuation range. You can decline without starting diligence or disclosing sensitive information. A polite rejection can also preserve the relationship if your plans change later.
2. Negotiate directly. Bilateral negotiation may fit when the buyer offers attractive terms, has a clear reason to acquire the company, and appears capable of closing. Owners may prefer direct negotiation when a faster process or tighter confidentiality matters more than testing the broader market. Concerns about employee continuity may also favor working with a buyer whose plans are already understood. Direct negotiation limits disruption, but one buyer’s proposal provides little evidence of broader market demand.
3. Conduct a limited market check. A limited check approaches a small group of credible alternatives under controlled confidentiality. Comparable proposals can test price, structure, cultural fit, and closing certainty without broadly advertising the company. The original buyer may resist or withdraw if you decline immediate exclusivity, so you should weigh that possibility before contacting others.
4. Run a full sale process. Broader outreach may fit when you are ready to sell and several qualified buyers could compete. A full process creates more comparative evidence, but it requires more time, management attention, and controlled disclosure. Competition does not guarantee a higher price or a completed transaction.

Mercer Capital similarly identifies rejection, direct negotiation, a limited process, and a full auction as valid responses to an acquisition proposal. Its family-business decision framework treats process choice as a tradeoff among market evidence, confidentiality, speed, and execution risk.

Buyer type can affect which path makes sense. A strategic buyer may have a specific operating reason to acquire your company, while a private equity buyer may focus more heavily on future growth, management continuity, and investment structure. Neither category produces better terms in every case. Salt Creek’s guide to a strategic buyer versus private equity buyer explains the practical differences.

A broader process should provide useful evidence rather than serve as an automatic response to every unsolicited offer. Salt Creek’s guide to a targeted market check or controlled M&A auction explains how bilateral, targeted, and competitive processes work. An attractive offer from a credible buyer may justify direct negotiation, while uncertain value or clear buyer depth may support wider testing.

Who to bring in and when

Consider involving an M&A advisor before you negotiate price, disclose detailed information, or choose a sale process. The advisor can assess the buyer, develop an independent value range, compare deal structures, manage communication, and test whether a limited market check would help. An advisor can serve as the main point of contact during negotiations, reducing the time you spend on buyer communications while operating the business.

Hire an experienced M&A attorney before signing a letter of intent. Your attorney reviews confidentiality, exclusivity, closing conditions, representations, indemnification, and other legal obligations. M&A attorneys also identify risks involving employees, shareholders, intellectual property, and regulatory matters. Transaction advisors serve different roles, so an M&A advisor should not replace legal counsel.

Your accountant and tax advisor should review the offer before you accept its structure. They can estimate after-tax proceeds, assess purchase-price allocation, identify tax liabilities, and prepare financial records for diligence. An accountant may also perform a quality-of-earnings analysis, which tests whether reported earnings are recurring and transferable rather than providing an audit opinion.

At Salt Creek Advisory, Jack and Connor Pitts remain directly involved throughout the engagement. Salt Creek’s standard M&A engagements carry no upfront retainer or monthly work fee. The firm earns a success fee only when a transaction closes. A success-fee model can create pressure to preserve deal momentum, so owners should ask any advisor how they respond when rejecting an offer or ending a process serves the owner better. Our guide explains how M&A advisor fees work and what to compare.

Offer-evaluation checklist

• Verify the buyer’s identity, acquisition history, financing capacity, internal approvals, and authority to make the offer.
• Confirm whom any intermediary represents and how that intermediary receives compensation.
• Sign an appropriate confidentiality agreement before sharing customer data, employee information, detailed financials, or other sensitive records.
• Develop an independent value range based on adjusted earnings, business risks, growth, and relevant transaction evidence.
• Reconcile headline value to expected net proceeds, including debt, working capital, escrow, expenses, taxes, and deferred consideration.
• Compare cash at closing with earnouts, rollover equity, seller financing, employment obligations, and other contingent terms.
• Ask an M&A attorney to review the letter of intent, especially exclusivity, confidentiality, financing conditions, and termination rights.
• Choose among rejecting the offer, negotiating directly, conducting a limited market check, or running a broader sale process.
• Engage an M&A advisor, attorney, accountant, and tax advisor before you disclose sensitive information, sign an LOI, or accept terms that may be difficult to change.

FAQs

• What should I do first after receiving an offer? Acknowledge the approach without accepting terms or sharing sensitive information. Confirm the buyer’s identity, request the proposal in writing, and involve your advisors before substantive discussions.
• How can I tell whether the buyer is serious? A credible buyer should identify its legal entity and decision-maker and provide evidence supporting its financing plan and transaction history. Confirm those claims through prior-seller references, financing evidence, and a clear explanation of any remaining internal approvals.
• Should I share financial statements early? Share limited financial information only after verifying the buyer and signing an appropriate confidentiality agreement. Start with summary results and withhold customer-level, employee, and other sensitive data until the buyer demonstrates credible interest.
• Should I sign a letter of intent right away? Review the price, cash at closing, contingencies, and binding provisions with M&A and legal advisors first. Exclusivity often takes effect immediately and prevents you from speaking with other buyers.
• Should every unsolicited offer trigger a wider market check? No. A limited market check may provide useful valuation evidence when other credible buyers likely exist. Direct negotiation may make more sense when the offer is strong and confidentiality or speed carries greater weight.

Getting help evaluating your offer

Your response should account for the buyer’s credibility, the offered price and terms, and your personal priorities. Jack and Connor Pitts are directly involved in reviewing offers and helping owners assess whether to negotiate, test the market, or decline. Salt Creek’s standard M&A engagements require no upfront retainer or monthly work fee. Salt Creek earns its advisory success fee when a transaction closes.

If you have received an offer for your business, Jack and Connor can help you evaluate the price, structure, and broader buyer market confidentially.