Nearly everyone gets excited when the handsome boy or pretty girl shows an interest in them. So what is different when a potential buyer appears on your doorstep? The owner(s) is intrigued and open to conversing, even if he/they never intended to market their firm at this moment in time. Conversely, everyone is a seller at the right price, no matter when.
We suggest that the potential seller move with caution. Sometimes this initial approach is disguising a form of competitive espionage. Even if that is not the case, exercise some discretion about giving your financial information. Contact your closest advisers, legal and accounting, for their input.
The percentages are against any transaction occurring with the first unsolicited buyer. Thus, knowing that maybe 10-20% of these approaches culminate in a viable deal, why waste too much of your time?
We are called in often by companies who have been contacted by legitimate buyers. These potential sellers need to be educated as to a normal sellside process, as well as the advantages/disadvantages presented by the lone buyer. Often, we are engaged to shepherd the due diligence and negotiate any possible deal. When the parties disband their pursuit of a transaction, the seller usually engages us to conduct a full marketing effort. What the potential buyer has done, short of completing a deal, is inform and ready the seller for a successful outcome.