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Sophisticated buyers with the same information often come to different conclusions about the value of a company. This article presents a case study that illustrates the wide spread of valuations in a transaction; it also examines why these buyers view companies so differently.

Any distribution company owner considering a sale asks himself a fundamental question: “What is my business worth?” For those companies sold in a one-off transaction, no one will ever know how the result might have been different had the competitive tension of a process with multiple parties been present – though the result is unlikely to have been worse. That genie cannot be put back in the bottle.

On the flip side, as an M&A advisor, I am regularly brought into failed situations where owners that thought they had a “full and fair value” with that one-off buyer become disappointed that the deal drags out or never yields a transaction as they had expected. These owners often turn to …