Defensive M&A Services

Max-out Unsolicited Offers.

Defensive M&A Services

  • Defensive Valuations 
  • Defensive Due Diligence
  • White Knights
  • Shotgun Auctions
  • Restricted Data Rooms
  • Reverse Break Fees

The most marketable assets in fintech, payments and SaaS are never long for operating inconspicuously. As such, it’s not unusual, in fact it’s very common, for owners and founders to attract the attention of financial sponsors and strategics with interest in a merger, acquisition, equity investment, or partnership. Historically, greater than 80% of the assets we bring to market for exit or funding have already been solicited by a financial sponsor or strategic. In many of those cases, the unsolicited interest was the primary driver for engaging our investment banking services.

M&A defensive services were developed back in 1976 by infamous investment banker Martin Siegel, then of securities firm Kidder, Peabody & Company, in response to a booming market of hostile takeovers. Because of The Williams Act of 1968, target companies had to respond to hostile tender offers within seven days. As such, target companies hired investment bankers to protect shareholders by ensuring they were ready and available to respond to unsolicited tenders, and also, develop various defensive strategies, including ‘Golden Parachutes’ and the seeking of ‘White Knights’, to compel hostile bidders to abandon deals if deal terms weren’t improved. Another effective defensive tactic employed by investment bankers at the time was the execution of a turnkey auction process to identify a better deal for the target company, in terms of deal structure, deal economics, and strategic alignment.

Transaction Advisory and Defensive M&A Services

Fast forward to the 2020’s, and although hostile takeovers are very rare, when startups and high-growth technology companies receive unsolicited inquiries from strategics and financial sponsors for acquisition or investment, it’s not unusual to see modern versions of defensive M&A services deployed.

Wellesley Hills Financial’s Defensive M&A Services assist clients in properly positioning themselves and their respective companies to respond to unsolicited market interest. Defensive services range in scope from running due diligence and valuation work, to executing a shotgun auction process to maximize client returns. All defensive services are designed to protect the client, and ensure that client receives the optimal deal structure and economics.

There are very few situations in which it’s advisable for the owner or founder of a quality fintech, payments or SaaS company to negotiate an unsolicited offer without a trusted advisor’s representation. To do so without a true market bidding dynamic in place almost always leads to a suboptimal outcome.

Our Defensive M&A Services are custom designed to address these unique situations and offer flexible billing solutions to minimize client outflows until such time as a transaction occurs.