From personal experience of buy side, I think the best way to negotiate is by getting to know your target more from a personal perspective, this tends to reduce the amount of friction created as the seller then doesn’t see you as an aggressor and it then becomes easier for them to concede ground in negotiations.
I’ve found that if you negotiate aggressively, it tends to end conversations very quickly.
From the sell-side, it is always good to know what are the alternatives available to your company and how much you are willing to compromise before calling it a no deal. It is also important to find out more about your acquirer and the decision makers through getting to know them on a more personal level if possible as this would also affect top level integration post acquisition.
This is an aspect I need to understand more. But from a role-playing exercise I saw during a dealmakers conference, it seems that specialist lawyers often play a significant role in terms, particularly non-financial, including establishing boundaries on non-compete covenants.
It is most important to know what your counterpart really interests are. Then only we can play out our concession cards better.
You need to make the other party well aware that you are giving something of value and understand how they would reciprocate on the same. If there is an element of trust issue regarding the favor other party would do, better to keep a contingent concession in the agreed terms and conditions.
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