How to Sell Your Business to a Competitor: Maintain Anonymity & Achieve Your Ideal Exit

Many owners prefer selling their business to a competitor because it typically results in a higher purchase price, a faster and smoother exit, and confidence that their company will be in capable hands.

However, there can be complications when targeting competitors, such as:

• How do you maintain anonymity in the sale process? Approaching competitors directly can lead to rumors about the sale, which may negatively affect your operations and business value. In early conversations with potential buyers, it’s important to remain anonymous while sharing aspects of your business that will catch their interest. As a potential buyer becomes more serious, non-disclosure agreements (NDAs) allow for the sharing of confidential information.

• How do you target enough competitors to achieve your ideal exit? Your ideal exit includes both your financial goals and what you want for your company’s future — its brand, legacy, and employees post-sale. For example, you might find a competitor willing to pay a premium price, but they may not integrate your current team into their business. For some owners, that’s a fair tradeoff; for others, it’s not. Expanding your buyer pool increases the chances of securing an offer that aligns with your needs.

Below, we share a customer story of a business owner who targeted a healthy number of buyers and secured a fair price, met his desired exit timeline, and provided partial ownership to his daughters, who held key roles in the company.

In this post, we explore how working with an M&A advisor helps you achieve these goals and more. They protect your anonymity while you evaluate potential buyers and ensure confidentiality as you engage with vetted buyers throughout the sale process.

They can also help you reach your ideal exit by targeting a broad pool of potential buyers, including direct competitors, indirect competitors, and adjacent companies, providing you with more options to choose from.

How to Sell Your Business to a Competitor While Preserving Anonymity

Partnering with an advisor or business broker is essential for maintaining anonymity during the early stages of the sale process. Without one, directly engaging with competitors to gauge their interest could immediately signal that your business is for sale.

If this information falls into the wrong hands, it can disrupt business operations and destabilize your business. Non-serious competitors may exploit the news, spreading uncertainty in the market and potentially driving away employees, customers, and suppliers.

When it comes to maintaining anonymity, advisors know how to:

• Vet interested competitors on your behalf. This includes screening buyers to ensure they’re genuinely interested, financially capable of completing the acquisition, and aligned with your exit goals.

• Release relevant business information in stages and use NDAs to maintain confidentiality. In initial conversations with buyers, advisors will maintain your anonymity until a buyer is more thoroughly vetted. As negotiations progress, they know when to disclose key details and when to issue NDAs to ensure confidentiality before sharing sensitive information, such as financial statements and trade secrets.

Both of these advisor functions save you time and help secure the best offer. Business owners who represent themselves (i.e., sell their business without an advisor) not only forgo anonymity at every stage but also spend around 25–30 hours a week managing the M&A process. Much of this time is spent finding and evaluating buyers and negotiating the sale. When you work with an advisor, they handle the M&A process on your behalf and work to secure better results, freeing up your time to run your business.

Advisors Will Vet Buyers on Your Behalf

Advisors will create marketing materials to showcase your business and highlight its value to potential buyers. They’ll then use these materials to target the right buyers within their network.

Crafting the right pitch and messaging helps filter out those who aren’t a good fit. When a buyer shows interest in your business, your advisor will continue evaluating them based on key factors, such as:

1. Why a buyer is interested in your business.

A serious buyer can identify specific aspects of your company or business operations they’re interested in and explain why.

For example, an advisor within the Axial Network helped Temco Logistics, a white-glove delivery service, get acquired by Home Depot. Home Depot valued Temco’s infrastructure as a last-mile delivery service, recognizing its potential to help deliver bulk goods to customers. The advisor saw this as a strong fit, which played a key role in the success of the sale.

2. Whether a buyer is financially capable of acquiring your company.

Advisors will assess the buyer’s ability to fund the acquisition, including where the funds will come from and how the purchase will be financed — whether through cash, debt, or a combination. Most credible competitors will have sufficient cash on hand to make the acquisition without raising outside equity.

3. The buyer’s overall fit with your exit goals.

Your advisor will understand your reasons for selling, including your timeline and desired exit terms. They’ll evaluate potential buyers based on these criteria to ensure a good match, both in terms of price and the future of your company and team post-sale.

Those are just some of the factors an M&A advisor will consider when evaluating buyers, you can learn more in our post on How to Find a Buyer for Your Business.

Advisors Release Information About Your Business in Stages & Use NDAs

Initially, advisors will send an Investment Teaser to buyers within their network. This one-page, anonymized document is designed to generate interest in your business.

Your advisor will collaborate with you to create the teaser, highlighting key details that attract the right buyers. It typically includes a business description (without revealing your company name or identity), EBITDA, revenue, historical financials, and more.

Here’s an example of an Investment Teaser for an HVAC business:

If a buyer expresses interest after reviewing the Investment Teaser — and is deemed a potentially good fit by your advisor — the next step is to share more detailed information through a Confidential Information Memorandum (CIM).

The CIM contains detailed information such as your sales process, manufacturing capabilities, management team structure, intellectual property, company assets, and high-level financials (ideally five years of historical data and projections).

To ensure this information is protected, your advisor will have the buyer sign an NDA before delivering the CIM.

After this, the next documents are:

• Indication of Interest (IOI): This outlines key information such as the estimated deal price, how the buyer plans to finance it, employee retention strategies, and a rough transactional timeline.

• Letter of Intent (LOI): Buyers may skip directly to submitting an LOI, particularly if they’re a competitor familiar with your business and market. The LOI presents a specific bid for your company, along with the steps to finalize the deal. While it’s not a purchase agreement, it’s a significant commitment, where you as a business owner agree to give the buyer an exclusive time window (usually around 90 days) to conduct their due diligence and to close the deal.

Privacy and anonymity are crucial in the early stages, starting with initial conversations and the Investment Teaser. As discussions progress, the advisor will make sure to get a signed confidentiality agreement before revealing information that’s in your CIM.

Once trust is established, the NDA allows the process to move forward with the IOI/LOI and due diligence, where the buyer inspects your business operations and financials.

By managing this delicate process and continuously evaluating potential buyers, your advisor helps ensure both privacy and the identification of a buyer with the right experience, financial capability, and strategic fit for your business.

In a given week, an advisor can:

• End contact with a buyer who requested the CIM but raised a red flag in response to one of your questions.
• Answer questions from another buyer preparing to submit an IOI while verifying their capital sources to determine if it’s wise to move forward.
• Receive and review an LOI from a third buyer and discuss the offer with you in detail.
• Handle initial inquiries from other potential buyers who have just seen the teaser.

How to Target Enough Competitors to Secure Your Ideal Exit (with a Real Example of a Seller Achieving Their Ideal Exit)

While you may have a specific competitor — or type of competitor — in mind, it’s best to target as many qualified buyers as possible to secure your ideal exit.

Focusing solely on a few direct competitors can limit your pool, potentially causing you to miss out on a better deal. This could mean settling for a lower price, compromising the future stewardship of your business, or facing delays that prevent you from exiting on your preferred timeline.

M&A advisors can help you increase buyer coverage by 10x because:

1. They have a wide professional network.

Advisors will have a network of buyers who are likely to see the value of your business. They look for synergies between your business and the buyer’s. These are buyers who can pay a premium, close the deal quickly, align culturally with your company, or have a proven track record of acquiring businesses like yours.

This is one of the reasons we look at an advisor’s relevant deal experience before recommending them to you. By pairing you with the right advisor, we’re opening up your pool of potential buyers and increasing the chances of you achieving your ideal exit.

2. They look beyond direct competitors.

Just because a company is a direct competitor doesn’t mean they’ll be interested in acquiring your business or be a strategic fit for your sale. The best approach is to target buyers who will understand the value of your company, whether they’re direct competitors, indirect competitors, or adjacent businesses.

For instance, when Temco Industries, a white-glove delivery business, partnered with their M&A advisors (recommended by their Axial Exit Consultant), they hadn’t considered selling to Home Depot, a customer rather than a competitor. However, their advisors recognized that Home Depot was seeking to acquire a logistics company to bring that function in-house.

By looking beyond direct competitors and focusing on buyers who would understand their value, Temco achieved their ideal exit.

How Increasing a Business’s Buyer Pool Led to Its Ideal Exit: A Client Testimonial from the Axial Network

Bob Falahee, the owner of SunPro (a wholesale manufacturer and supplier of sun protection products) was looking to sell his business while still maintaining a percentage of ownership for his family.

When Bob was ready to exit, he identified key strengths that would make the company attractive to competitors, including its unique supply chain, relationships with dealers, and a $10 million EBITDA milestone.

But he needed help reaching more buyers. Specifically, he wanted to expand his options by finding buyers outside of Florida, his home state. Bob turned to Axial to find the best advisor for his business and goals. After discussing his needs, we recommended partnering with Peakstone Group, who had a proven track record in representing businesses like his and delivering successful outcomes.

Working with Peakstone Group, SunPro entered the M&A process with the goal of securing Bob’s retirement and ensuring future careers for his two daughters, both of whom worked for the retail business associated with SunPro.

With Peakstone, SunPro expanded their list of potential buyers, ultimately receiving 290 signed NDAs, and 60 IOIs for the business. This widened buyer pool allowed them to meet with 12 buyers, with offers ranging from $40–$110 million.

Working with his advisor, Bob’s ultimate decision was to sign a purchase agreement with HunterDouglas, a strategic buyer. Despite higher offers from private equity firms, he chose HunterDouglas because of their deep understanding of SunPro’s business and thorough due diligence before submitting their LOI. The deal met Bob’s financial goals for the sale (securing a 9x EBITDA multiple) and secured Bob’s daughter’s careers, as 30% of the retail business ownership was rolled over to the family.

By working with an advisor, Bob Falahee significantly increased his buyer pool and selected the best deal — one that provided a competitive price, a smooth transition and due diligence process, and kept a minority ownership within his family. Read the full case study here.

Next Steps: Beginning the M&A Process

Above, we looked at two key considerations when selling to a competitor:

• Maintaining anonymity as you engage with potential buyers.
• Targeting enough buyers to get an offer that matches your exit goals.

These considerations exist within the larger context of the M&A process. Once you’ve hired your advisor, the M&A process begins. Your advisor will:

1. Determine your business valuation range.

Your advisor will use several valuation methods to triangulate an accurate price range for your business. The most common are Discounted Cash Flow (DCF), Comparable Companies, and Precedent Transactions.

It’s crucial to work with an experienced advisor to get an accurate valuation and set you up for a successful sale. Advisors leverage data from past deals that haven’t been made public to provide the most accurate valuation for a sale to a competitor.

2. Create marketing materials to target competitors and other viable buyers.

Your advisor will create anonymized marketing materials tailored to specific buyers, such as direct or indirect competitors familiar with your industry.

This includes an investment teaser overview and a detailed Confidential Information Memorandum, which your advisor will release only after a potential buyer expresses interest and signs an NDA.

3. Evaluate buyers and execute an LOI.

After your advisor screens potential buyers and vets the IOIs they submit, they’ll assist you in selecting a single LOI to execute. The LOI outlines the proposed price and deal structure from the buyer. Executing it begins a due diligence process under an exclusivity agreement, but the sale is not yet complete.

4. Negotiate and close the deal.

Once the LOI is executed, the buyer will conduct due diligence, which includes reviewing financial information, holding meetings, and performing site visits. You and your advisor will work with the buyer to negotiate the terms of the deal and purchase agreement, including the transition period, closing conditions, and indemnification provisions.

Your advisor plays a vital role in the negotiation process, remaining neutral and composed as you evaluate offers and secure the best possible outcome.

If you’re ready to start this process, you can find the best M&A advisor to sell your business.

At Axial, we have over 2,000 vetted advisors and can connect you with the right match.

We begin by pairing you with an Exit Consultant who learns about your business and exit goals. Your consultant will leverage our network of experienced, qualified, and vetted advisors with proven track records and high professionalism.

You’ll receive a shortlist of 3–5 advisors, along with insights to guide your decision. Your Exit Consultant will also assist in interview preparation, ensuring your personal information remains confidential until you’re ready to proceed.

The M&A process has many moving parts, and the right advisor makes all the difference. With Axial, you gain unparalleled insights, expert guidance, and a strategic partner throughout.

We also provide several helpful resources for small business owners to better understand what it takes to sell a business, including:

• Selling a Business Checklist: 6 Steps to Sell Your Business
• Preparing a Business for Sale in 3 Steps
• How to Value a Company for Sale: 3 Methods and Common Mistakes to Avoid
• How to Sell a Business Quickly and Avoid Common Pitfalls
• Small Business Exit Strategy: How to Exit Your Business Through an M&A Process
• How to Find Buyers for Your Business: 2 Types of Buyers Explained