How should you respond to cold outreach from potential buyers?
For owners of privately held Canadian businesses with $10 to $50 million in revenue, an unsolicited call from a buyer — private equity, a strategic acquirer, an investor, or even a major customer, supplier or rival — can be both intriguing and disruptive. Engaging directly may seem logical, but it can jeopardize the business's value, confidentiality and strategic position. The smarter move is to redirect inquiries to your M&A advisor.
Why do owners respond to cold outreach?
- Curiosity about market value as valuations shift with industry and economic trends
- Flattery and a sense of opportunity, especially from familiar stakeholders
- Lack of a formal exit plan — a 2024 CFIB report found nearly 75% of small and mid-sized business owners have no formal succession or sale plan
- A perceived sense of control over the process
- Fear of missing out on a prime opportunity
Why redirect to M&A advisors?
- Protecting confidentiality — discussions proceed under non-disclosure agreements
- Maximizing valuation — a competitive process across many buyers rather than a single party
- Navigating complex negotiations — deal structure, warranties and indemnities
- Maintaining focus on running the business
- Access to a broader buyer pool, including cross-border buyers
- Avoiding emotional bias and conflicts with familiar customers, suppliers or rivals
What are the risks of going it alone? Undervaluation, loss of leverage from disclosing too much, time wasted on parties fishing for information, and reputational risk if word leaks. In one example, an Alberta manufacturing owner shared financials with a major customer without an NDA and later discovered the business could have commanded a 25% higher valuation through a competitive process.
How should you handle it? Politely defer, share nothing sensitive, redirect the caller to your advisor, and use the outreach as a prompt to assess your exit readiness.
Key facts: responding to cold buyer outreach
Redirect unsolicited buyer outreach to an M&A advisor rather than engaging directly
Why owners engage: curiosity, flattery, no exit plan, perceived control, fear of missing out
Nearly 75% of Canadian SMB owners have no formal succession or sale plan (2024 CFIB)
Risks of going alone: undervaluation, lost leverage, wasted time, reputational leaks
Advisor benefits: confidentiality, competitive valuation, skilled negotiation, a broader buyer pool
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax or financial advice. Consult qualified advisors regarding your specific circumstances.
