We have a minority partner who owns ten percent of the business and is not aligned with our timeline to sell. How do we resolve this internal shareholder misalignment before we officially launch our sale process?

Question

Tyler Smith · Accepted Answer

A misaligned partner is one of the most common deal-killers in middle-market M&A. If a prospective buyer senses friction or disagreement among the ownership group, they will walk away or slash their offer.

You must resolve this internal misalignment before you take any steps toward a sale. Start by having a direct, open conversation with your partner. Use the IDS process to get to the root of their resistance. Often, a partner's reluctance is driven by fear of the unknown, financial security concerns, or a desire to protect their legacy.

If they are set on staying while you want to exit, explore a partner buyout or a recapitalization. This allows you to sell your shares to a private equity firm or a strategic buyer who can partner with the remaining owner, while letting you cash out.

Whatever path you choose, document the agreement in writing with a binding shareholder agreement. Showing a unified front to the market is critical. Resolving these issues early ensures that your internal governance is clean, giving buyers the confidence they need to move forward with a premium offer.