How to approach a privately owned business about an acquisition

Some buyers assume they can only acquire a business that is publicly advertised for sale. In practice, an owner may be open to discussing a future transaction without having formally taken the business to market. A discreet and well-prepared approach can create an opportunity to explore strategic fit, but the way that approach is made matters.

Privately owned businesses are built through long-term effort, relationships and identity. An acquisition enquiry can be unexpected. It should therefore be specific, respectful and clear about what the buyer is proposing, while giving the owner room to decide whether a conversation is of interest.

Be clear about why this business

Before making contact, the buyer should be able to explain why the business is relevant. Does it offer a capability, customer relationship, geography or market position that supports a defined strategic objective? A generic message sent to many companies is unlikely to establish meaningful interest.

A credible rationale also helps the buyer decide what it is willing to explore. If the owner responds, both parties can discuss whether there is genuine alignment before sensitive information is exchanged. The buyer should know who will make decisions and what authority they have to pursue the discussion.

G&G’s buying a business service includes discreetly approaching owners and decision-makers, including businesses that are not actively for sale.

Choose the right route and tone

An approach can be made directly or through an adviser, depending on the circumstances and relationship between the parties. Where there is an existing commercial relationship or competitive sensitivity, a third-party approach may help create space for an initial discussion. There is no single right route; the buyer should consider the owner’s perspective and any conflicts or confidentiality concerns.

The first communication should be concise. It can state who the buyer is, why the business has attracted interest and whether the buyer would be open to a confidential discussion. It should avoid implying that the owner is already selling, making unsupported claims about value or applying pressure to respond quickly.

Respect the owner’s decision and timing

An owner may decline, ask for more information or say that the timing is not right. A respectful response preserves the relationship and avoids turning a commercial enquiry into an unwanted campaign. If the owner is open to a conversation, agree who will participate, what can be discussed and what information is appropriate at this stage.

The buyer should also be prepared for the possibility that the company is not a fit after learning more. An initial discussion is exploratory, not a commitment by either side. If the strategic case changes, it is better to communicate clearly than to keep the owner engaged without a realistic path forward.

Protect confidentiality on both sides

An acquisition approach can reveal the buyer’s strategy as well as the target’s. Both parties may have reasons to limit internal knowledge while they consider whether to proceed. Agree how sensitive information will be handled before detailed data is exchanged, and seek legal advice on appropriate confidentiality terms.

The buyer can prepare by identifying the minimum information needed to assess preliminary fit. Detailed financial or customer information may be more appropriate later, after the parties understand their intentions and have established suitable protections.

Maintain a disciplined pipeline

A single target should not become the buyer’s only option. Maintaining a pipeline of businesses that align with the strategy can help preserve choice and reduce pressure to force a transaction. It also makes it easier to compare the target against consistent criteria if discussions progress.

Make the first approach easy to understand

A useful first message is short enough to be read and specific enough to be credible. Introduce the buyer, explain why this particular company is relevant and invite the owner to decide whether a private conversation would be worthwhile. Avoid assuming the business is for sale, implying that an offer already exists or pressing for sensitive information at the first contact. The purpose is to open a respectful discussion, not to negotiate a transaction by email.

Before making contact, decide how to respond if the owner asks who else is involved, what the buyer hopes to achieve or how serious its interest is. Be prepared to explain the strategic rationale and the likely next step without overstating certainty. If an owner is interested, agree who will participate and how confidentiality will be handled. If they decline, acknowledge the decision and leave the relationship in good order. G&G’s buying service supports discreet outreach as part of a broader acquisition process.

This article is general commentary for Australian business owners and does not take account of any particular business, its circumstances or its objectives. Any figures, ranges and examples are illustrative only and are not a valuation, an appraisal or advice on your business. Advice on a specific business is given only through a confidential engagement with G&G Advisory Partners.