Are you really being hit on?

I’m a highly ordinary looking man and as such, I am not the guy women approach in a bar.

Except once. In Vegas. (Shhh, don’t get ahead of me and the story!)

I was there for an agency conference and was bored one night, so I walked down to the bar to get a drink. It had been a long day, so I’m pretty sure the sheen on my ordinary was looking pretty worn.

None the less, a few minutes after I sat down, an attractive woman sat at the bar next to me and started a conversation.

She got a little more flirty and suddenly I realized we were not just chatting -- she was trying to pick me up!

This was a novel experience and I will admit, my ego pushed right past my logic and for a few minutes… I was pretty impressed with myself. Everything I said was funny. She put her hand on my forearm. And then, like a lightening bolt from above… all of the dots began to connect.

Ordinary looking guy. Attractive woman. Late night bar. Vegas. Ohhhhh. Duh.

Then, I just felt silly. And figured she thought I wasn’t bright enough to catch on for a bit. Which made me a little mad. When I asked a few questions — she confirmed my suspicions and all of a sudden, I wasn’t all that funny or interesting. A few minutes later, I was alone at the bar.

Why am I telling you this story? Because with a slight twist, I think many of you are sitting at that bar with me.

The M&A emails and inquiries are off the charts right now. All of you are receiving emails, letters, and calls saying that they’ve been watching you and your agency is something special. Then, they offer you some ridiculous multiplier and you are feeling rather sexy.

But…be a little wary, no matter how handsome or beautiful you are. When they put their hand on your forearm… it isn’t just about how attractive you are or how you’re the only agency they’d offer this deal to or whatever their rhetoric is.

Here’s how I am seeing this play out 99.99% of the time:

• Agency owner gets approached by M&A specialist who either wants to buy them to roll them up into something bigger, has a buyer chomping at the bit to buy, or can find a buyer in no time.
• The initial offer is a staggering amount of money, even though the details are “loose”.
• The NDAs are signed and the due diligence begins.
• As details of the offer begin to come to light, the seller is appropriately a little concerned but forges on.
• $20K-$50K in legal fees later, the deal begins to get more complicated /more strings attached from the buyer’s side of the equation.
• “Discoveries” in the financials suddenly reduce the multiplier to a more normal number and the math doesn’t look so sweet to the seller anymore.
• The seller does the math and realizes they could make more money if they kept the shop and ultimately, turns down the deal, 50K lighter in their bank account.

The moral of this story? While there are certainly some agencies being bought and sold out there — most of you are walking pretty far down this path before you figure out that there’s a big, bad wolf underneath that cloak.

Sadly, by the time many of you are recognizing the situation for what it is… you’re already out a chunk of change and a huge investment of time.

So seller — beware.

Note: I’m talking about when a stranger approaches you. Not someone from inside the shop, or someone you’ve known for a long time in the industry. And not all strangers are bad. But do some homework, get to "no" faster, and when you feel like something’s not quite right… odds are, you are spot on.

Drew McLellan, with Agency Management Institute, produces a weekly newsletter with updates, tips, and market information of value to marketing agencies, owners, and employees. If you'd like to receive the weekly newsletter, follow this link to subscribe.