training and lots of experience presenting offers and dealing with objections so it is safer to let us do it. 3. We prepare a PowerPoint summary of the offer to talk through with them before leaving them with the hard copy . This allows us to talk through the main points in summary and then leave them with the detail. It is helpful to show them what their cash flows will be at closing with all the components as well as throughout the deferred period. 4. We allocate significant time to go through the offer and explain all aspects in detail, including how we got to the numbers. This allows the Seller to understand the mathematical nature of that and not revert into used car negotiation mode. 5. We invite them to comment when they are ready. This avoids putting people on the spot. However, we set the expectation that any counter-offers should have a mathematical basis and not just be some kind of negotiation tactic. Getting to Heads of Terms We use a standard Transworld M&A template for all of our transactions. This covers all the commercial points as well as non- disclosure, confidentiality and exclusivity. But makes the point the Heads of Terms is non-binding and does not have penalties on either party from leaving the transaction. The reason for this is that if we have a good Seller prospect, it allows getting the Heads of Terms signed to be low risk for the Seller but gives you as a Buyer what you want which is exclusivity and a commitment level. If you start adding abortive costs, then the Sellers will take much longer, invite their lawyer in and want to have more discussion. All of this lowers the chances they will eventually agree to move to the next phase (negotiations can erode trust).
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