How can I sell my business to private equity and create competitive offers?

By Michael D. Rubin, CEO & Founder · September 2026 · 807 words

To sell to private equity at the best price, you need several private equity groups, and ideally a strategic buyer or two, evaluating your company at the same time, on the same information, with the same deadline for offers. Competition sets the price. A single private equity firm negotiating alone sets its own.

Private equity (PE) groups are investment firms that buy companies with money raised from investors, usually combined with bank debt, and plan to grow them and sell them again after several years. They are regular buyers of profitable companies in the lower middle market. Here is how they think, and how to make them compete for your company.

Understand what private equity is buying

PE firms buy in two ways. A platform is their first company in an industry, and it needs a management team that can grow. An add-on is a company they bolt onto a platform they already own; there they care most about customers, crews, locations or products that fit. Knowing which you are shapes who to approach and how to present the company.

They also think in returns. They want earnings they can verify, a visible path to growth, and a team that stays when you step back. That is why their offers commonly include rollover equity, meaning you keep a minority stake in the new company and share in the gain when it is sold again. Some owners welcome that second payday; others want a clean exit. Decide which you are before offers arrive.

Build a process, not a conversation

• Prepare before anyone calls. A financial recast showing adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, with owner and one-time costs added back), clean statements and answers to obvious questions.
• Tell the story once, well. A confidential marketing package, and at MDR a professionally produced HD video, so every buyer sees the same picture.
• Screen before sharing. Buyers sign a confidentiality agreement and show they can fund the purchase before they see details.
• Contact many buyers at once. PE platforms, PE-backed companies seeking add-ons, family offices and strategic buyers such as larger competitors.
• Hold meetings in a tight window. Management meetings over a few weeks keep buyers moving together instead of one racing ahead.
• Set a date for letters of intent. A letter of intent (LOI) is a written offer stating price, structure and key terms before the final contract.

Read private equity offers for more than price

PE letters of intent often look alike on headline price and differ in the details. Look at how much is cash at closing versus rollover equity or an earnout (part of the price paid later only if targets are met). Ask how much debt the buyer plans to use and whether its lenders are already engaged. Check what the buyer expects of you after closing, in what role and for how long, and how long it wants exclusivity, the period when you agree not to talk to other buyers.

A slightly lower offer with more cash, less financing risk and a shorter exclusivity period is often the better deal. The guide on how to compare offers shows how to put them side by side.

Keep strategic buyers in the mix

Even if you expect private equity to win, include competitors and other strategic buyers. They sometimes pay more because they can remove duplicate costs or sell more to your customers, and their presence keeps PE bids honest. Confidentiality needs special care here: a competitor who learns of your sale without an agreement in place can use it against you with customers and staff. The piece on selling your business confidentially covers how that is managed.

Mistakes that cost owners their leverage

• Taking the first PE call and sending financials before any confidentiality agreement is signed
• Letting one buyer move ahead of the others and set the timetable
• Granting a long exclusivity period on a vague letter of intent
• Treating rollover equity as if it were worth the same as cash
• Letting results slip during the process, which invites a lower price in due diligence

How we run it at MDR & Associates

We go to our own database of qualified private equity groups, capital groups and individual buyers first, and only then, if needed, to blind listings on the major business-for-sale marketplaces. Every buyer sees a blind profile, then signs an NDA and completes a financial profile before seeing any detail. We aim for multiple letters of intent at the same time, present every offer to you in person, and a principal of the firm is in every negotiation. In 2023 the buy-side named MDR & Associates to the Axial Advisor 100 list of most referred lower middle market advisors. Our sell-side service and ten-step process show how it runs from start to wire. To discuss your company, contact us.

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