Many business owners assume that selling a company is primarily about finding a willing buyer and agreeing on a price. In reality, buyers determine value very differently. The businesses that achieve premium valuations are typically those that have been carefully prepared for sale, marketed to the right audience and positioned to demonstrate future growth rather than simply historical financial performance.

That was one of the central messages from mergers and acquisitions advisory Deal Leaders International’s masterclass webinar on navigating the minefield of selling your business, in which moderator Michael Avery spoke to Deal Leaders International joint-CEOs Rick Grantham and Andrew Bahlmann about what separates successful transactions from disappointing exits.

Opening the discussion, Avery noted that every business owner ultimately exits their business, whether by choice or circumstance. The key question, he noted, is whether that exit happens on the owner's terms.

He suggested that many entrepreneurs know every detail of their turnover, margins and capital expenditure, but spend far less time considering why someone would actually want to acquire their business. Companies, he observed, are not sold – they are bought – and understanding how buyers think is fundamental to maximising value.

Strong Buyer Appetite Remains

Despite persistent concerns about South Africa's investment climate, Grantham said buyer appetite remains stronger than many business owners realise, particularly in engineering, manufacturing and mining-related industries.

He noted that Deal Leaders International rarely takes a business to market without receiving offers, adding that the challenge is not whether buyers exist but rather identifying the right buyer and running an effective sale process.

International interest also remains robust. Around a third of the firm's transactions over the past year involved overseas buyers, demonstrating continued confidence in quality South African businesses. However, Grantham stressed that international acquirers are generally attracted by companies capable of generating revenue beyond South Africa's borders rather than businesses solely dependent on the domestic economy.

Bahlmann agreed that international investors often have a more balanced view of South Africa than local business owners assume.

While acknowledging challenges such as regulation and perceptions around doing business in South Africa, he pointed out that experienced international investors approach opportunities [with] "eyes wide open" after conducting extensive due diligence. Every investment destination presents risks, he said, and sophisticated buyers focus on identifying businesses capable of delivering attractive growth despite those challenges.

The discussion also highlighted how the profile of potential buyers has evolved.

Rather than focusing only on direct competitors, Bahlmann said sellers should consider buyers elsewhere in the value chain or in adjacent sectors where strategic synergies may exist. Frequently, the highest-value acquirer is not the obvious one but a business that can unlock significantly greater growth from the acquisition.

Grantham pointed to mining services and mineral processing as sectors currently attracting particularly strong buyer interest. Businesses that combine South African operational expertise with international revenue streams are especially attractive because they offer both stability and access to global growth opportunities.

Software and technology companies also continue to attract interest, particularly where they can demonstrate successful international sales rather than simply possessing promising intellectual property. Buyers, Grantham explained, want proof that innovation can be commercialised, not merely that it works technically.

Beyond Financials

Asked how business owners should assess whether they are ready to sell, Grantham noted that readiness depends largely on the type of transaction being pursued.

“Business size remains important, with larger businesses generally attracting more international buyers. Succession planning is another critical consideration, particularly where founders remain heavily involved in day-to-day operations,” he said.

However, he cautioned against viewing readiness as a simple yes or no question. Instead, different levels of readiness open different transaction opportunities.

Bahlmann added that owners frequently confuse their own emotional readiness with the readiness of the business itself.

“While a company may be well positioned for sale, founders often struggle to separate themselves emotionally from the business they have built. Successful exits, therefore, require both commercial preparation and personal preparation,” he explained.

Throughout the discussion, both speakers repeatedly emphasised the importance of preparation.

Rather than beginning preparations only once a decision to sell has been made, they said that building an exit-ready business should form part of the broader business strategy.

“Strong governance, timely management reporting, documented processes and clear succession planning all reduce buyer risk and increase confidence,” said Grantham.

Equally important is demonstrating credible future growth. Buyers are willing to pay higher valuation multiples not simply because of historical earnings but because they believe those earnings can continue growing under new ownership.

According to Bahlmann, sellers must be able to support growth forecasts with evidence rather than optimistic assumptions, making governance and documentation increasingly valuable during due diligence.

Creating Competition

One of the strongest themes to emerge from the webinar was the importance of creating competitive tension among buyers.

Grantham warned against engaging with a single interested party, explaining that sellers who grant exclusivity too early surrender negotiating leverage.

Instead, multiple buyers should be approached simultaneously to generate competing offers and allow market forces to determine value.

He also cautioned owners against setting asking prices prematurely or prescribing deal structures before buyers have submitted proposals. Buyers should first be encouraged to present offers based on their own strategic objectives, after which negotiations can begin.

Drawing on recent transactions, Grantham said strong competitive processes had enabled businesses to receive exceptional offers without requiring lengthy price negotiations.

Finally, Avery observed that businesses achieving premium valuations are rarely the fortunate ones. Instead, they are the businesses whose owners have invested time in preparation, created options through competitive buyer engagement and ultimately positioned themselves to negotiate from a position of strength.