M&A Sellers: Scripting Your Initial Call to Prospective Targets
When you get the right person for your M&A deal on the phone, you need to be prepared. You should have a script in front of you. It quickly covers the basics: what the company does, its clients, the revenues and profits, and what the company is seeking to do. Get to the facts quickly and leave it at that.
Here’s a standard script for starting a conversation or leaving a voice mail for someone:
[Individual’s name], this is [your name] with [name of investment bank]. My number is 312-XXX-XXXX. I’m hoping to talk with you for a moment about a client of mine to explore whether this might be a suitable acquisition target for you.
My client is a highly profitable marketing services company. It provides lists, list management, and data-aggregation services for companies that market to medical/healthcare providers. Customers include medical publishers, pharmaceutical companies, medical equipment/device suppliers, healthcare recruiters, and more.
The company represents a great add-on opportunity for a marketing services firm (especially one with a medical/healthcare focus), a publishing firm, or a data analytics company.
The company has grown at about 18 percent per year since inception in 2001; ’07 revenues were about $19 million with $3.4 million in EBITDA [earnings before interest, taxes, depreciation, and amortization].
[If leaving a message] Please call me at your convenience to discuss further, 312-XXX-XXXX.
Don’t worry if the grammar isn’t perfect! You’re not reading the script as is. You simply want the salient points in front of you for quick and easy reference because you can easily skip or omit an otherwise important fact during a conversation.
Practice your script a few times before making a call. You want to focus on getting the gist of the message across, not rereading the whole thing verbatim. Don’t read it exactly the same time and time again, either. That just makes your pitch sound canned, and you want to sound conversational. The script is just there to help cue your memory about what to talk about.
The script’s abbreviated cousin is the talking point document. If you feel a full written script may make you sound too rehearsed, you may find simply having the salient points in front of you helpful.
Here’s an example:
$50 million manufacturer of food equipment
Well-known brand names
Biggest bang for buck for Buyer is someone who can move production to own facility, which would result in $15 million of contribution
Company is profitable, roughly $3.5 million in EBITDA
Owner is in his 80s, in the midst of estate planning, hence the interest in selling — would keep it otherwise
In this case, you have the basics of the deal in front of you and your specific words will be based on the flow of conversation you have with potential Buyers.
If you have top targets, don’t call them right out of the chute. Work out the inevitable delivery kinks in your script on lower-ranking targets. After you smooth out your delivery, you can then call your top targets more confidently.
Just in case you get cut off when leaving a message, always start by stating your name and number at the beginning of your message. When leaving a message, speak slowly and clearly, especially when stating your name and leaving your number. Nothing’s wrong with stating your name and number at the beginning of a message and again at the end.
Don’t rattle off your phone number is a rapid fire, staccato fashion. Make calling you back easy for the recipient of your message.