Private Equity Approached My Company: What to Do

If private equity approaches your company, treat it as a signal, not a valuation. The right first move is to slow the conversation down, protect confidentiality, verify buyer seriousness, and compare the approach against the broader buyer universe before you grant exclusivity or share detailed financials.

Lyndon Advisory helps business owners assess unsolicited private equity approaches, understand likely valuation range, and decide whether a bilateral discussion or structured sell-side process is the better route.

First question	Why it matters	Seller action
Who is the real decision-maker?	Junior sourcing teams often screen many companies before partner review.	Ask who sponsors the thesis internally.
What investment thesis are they pursuing?	A vague approach rarely supports premium valuation.	Ask why your company fits their platform or fund mandate.
Are they asking for data too early?	Detailed financials before an NDA weakens confidentiality.	Share only high-level information until protections are signed.
Are they pushing exclusivity?	Exclusivity before price discovery removes your leverage.	Do not grant it without a written offer and alternatives.

The context matters. Bain’s Asia-Pacific Private Equity Report 2026 describes selective capital markets and intensified competition for quality assets, while SRS Acquiom’s 2026 Deal Terms Study analyzes more than 2,300 private-target acquisitions closed from 2020 through 2025. For lower-middle-market owners, that means price is only one variable; earn-outs, escrows, purchase price adjustments, and certainty of close can matter just as much.

Why Private Equity Approaches Owners Directly

Private equity firms approach owners directly because proprietary access improves their economics. If they can engage you before an advisor runs a process, they may avoid competition from other sponsors, strategic buyers, and family offices.

Common reasons for a direct approach:

• Platform thesis: the fund wants to buy a strong standalone company and build around it.
• Bolt-on thesis: one of its portfolio companies needs acquisitions in your sector.
• Market mapping: the firm is studying the sector and wants to test owner openness.
• Succession angle: your ownership profile suggests you may be considering retirement or transition.
• Competitor pressure: another buyer may already be active in the sector.

None of this is bad. A direct approach can be a useful entry point. The mistake is assuming the first buyer is the best buyer.

What Not to Do in the First Conversation

Do not negotiate valuation before you know the buyer’s thesis. Private equity firms build models around target returns, leverage capacity, management incentives, and exit assumptions. If you anchor too early, you may be negotiating against a sophisticated model without your own valuation work.

Do not send detailed monthly financials, customer lists, contracts, margin data, or pipeline reports before a proper NDA. Even a reputable buyer can learn competitively sensitive information that affects future negotiations.

Do not agree to exclusivity because the firm says it needs focus. Exclusivity is appropriate only after a credible LOI, valuation range, diligence plan, and advisor review. Once exclusivity starts, the buyer has much more leverage over timing, diligence scope, working capital, earn-out structure, and legal terms. See Buyer Asked for Exclusivity before signing a no-shop or LOI.

How to Test Whether the Approach Is Serious

Ask direct questions early:

1. Which fund or portfolio company is pursuing this?
2. Who is the investment committee sponsor?
3. What sectors, geographies, and deal sizes does the fund target?
4. What similar companies has the firm acquired?
5. Would this be a platform acquisition, bolt-on, minority investment, or recapitalization?
6. What process do they expect before submitting an indication of interest?

A serious buyer can answer these questions clearly. A sourcing intermediary, junior analyst, or loosely interested fund will often stay vague.

Compare the PE Approach Against Other Buyer Types

A private equity firm is one buyer type, not the market. The full buyer universe may include:

• other private equity funds with relevant portfolio companies;
• strategic acquirers seeking geography, product, customer, or capability expansion;
• family offices that prefer founder-owned companies and longer holding periods;
• search funds or independent sponsors for smaller profitable businesses;
• management teams that may be credible with financing support.

For many owner-led companies, strategic buyers may pay more than private equity because they can underwrite synergies. For some businesses, private equity may pay more because it values management continuity, recurring revenue, and bolt-on potential. You only know after structured buyer mapping.

“A PE approach is useful because it proves someone has a thesis. But it does not prove price. Sellers create leverage by understanding who else has the same thesis, who can pay more for synergies, and who can actually close. The right question is not ‘is this buyer serious?’ It is ‘is this the best buyer available without exposing the business unnecessarily?’”

— Daniel Bae, Founder & CEO, Lyndon Advisory, former M&A advisor with over US$30 billion in transaction experience.

Bilateral Discussion vs Structured Process

Route	When it can make sense	Main risk
Bilateral with the PE firm	Strong offer, clean terms, trusted buyer, urgent timing, narrow buyer universe	Weak price discovery and limited leverage
Limited market check	You want alternatives without a full process	Requires careful confidentiality control
Full sell-side process	Multiple buyer types could be credible and value matters	More preparation and longer timeline

If the buyer has already made a strong written offer, a limited market check may be enough. If they have only expressed interest, a broader process is often the better way to find market value.

What to Prepare Before Sharing Information

Before opening diligence, prepare:

• three years of financial statements and management accounts;
• normalized EBITDA adjustments;
• customer concentration summary;
• revenue by product, geography, and channel;
• management team overview and key-person risk;
• cap table and ownership structure;
• major contracts, leases, licenses, and regulatory approvals;
• a simple explanation of growth opportunities.

This does not mean sending everything immediately. It means knowing what will be requested so you can control sequence and quality.

When to Ask for Help

Get independent advice before signing an NDA drafted by the buyer, sharing detailed information, discussing price, or granting exclusivity. A short review can prevent mistakes that become expensive later.

If you have been approached by private equity, submit a confidential valuation inquiry. Lyndon Advisory will review the buyer approach, your company profile, likely buyer universe, and whether a structured process is worth pursuing.

Related Reading

• How to Sell a Business
• Unsolicited Offer to Buy My Business
• How to Choose an M&A Advisor
• Competitor Wants to Buy My Business
• Business Partner Wants to Sell
• M&A Advisory Fees
• Sell-Side M&A Process
• How to Build a Buyer List in M&A
• Private Equity
• Letter of Intent
• Non-Disclosure Agreement