What buyers really look for in an M&A

Mergers and acquisitions (M&As) remain a key pathway for growth and transition, but these exercises are also becoming more selective. As PwC’s latest M&A Outlook shows, deal values have continued to rise even as volumes soften—a signal that buyers are prioritising scale, resilience, and strategic transformation. 

For private businesses, this is often where the pressure begins as they consider a sale to pursue growth while navigating generational succession.  

Across Malaysia, many private business owners have built successful companies over the past decades, based on entrepreneurial instinct, deep market knowledge, and long-standing relationships. However, reporting frameworks, systems, and internal processes don’t always evolve at the same pace as the business, which becomes a pressure point in an M&A. 

Fundamentally, deals do not fall apart because of the business itself, but often due to gaps in how the business is understood, tested, and trusted by buyers. 

This is what makes a sale such a defining moment for business owners. Done well, it can unlock a lifetime of value, enable succession, and fund the next phase of growth. 

The difference often comes down to preparation, credibility, and trust as buyers weigh the quality of information, resilience of earnings, reliability of reporting, and the management team’s ability to articulate performance clearly and confidently.

Common M&A pitfalls

Value is often lost in an M&A when there is a gap between the business and how it’s presented to buyers. In our experience, deals most often come under pressure or fail for three, sometimes underestimated, reasons:

• Deal readiness: Gaps in deal readiness that create delays and lead to deal fatigue

• Narrative misalignment: Misalignment between the seller’s growth story and the underlying historical financial data, potentially causing buyers to lose confidence in the deal 

• Responsiveness: Inability to respond quickly and clearly to buyer concerns, eroding trust and creating unwarranted doubts  

For many private, founder-led businesses, these challenges only become visible during a transaction—when expectations around transparency, consistency, and responsiveness shift significantly. 

An example from the retail and consumer sector demonstrates how quickly these pressures can surface.

Bridging the gap between business performance and deal readiness

In an industry known for speed and efficiency, a sale of a private retail and consumer business can amplify disruption concerns, especially when systems, processes, and reporting capabilities aren't keeping pace with the business. 

Three key challenges we typically see include: 

• Fragmented information: Data is spread across the business with no centralised data management and reporting. Critical metrics like gross margin are not monitored at a sufficiently detailed level, making it hard to present a clear and holistic view of business performance.

• Inconsistent performance narrative: Where financial and operational data is not integrated, it becomes challenging to explain the business performance in a commercially compelling way. In an often time-sensitive transaction, this severely weakens the overall business growth story crucial to securing strong offers—during buyer discussions.

• Risks not addressed upfront: Retail and consumer businesses are exposed to external factors which are often time-sensitive, and distort reported performance if not clearly articulated. These include foreign exchange movements, marketing income, or expenses not recognised on a timely basis, and pricing delays. If not identified and explained in the transaction process, these items create the impression of volatile profitability, making it difficult for buyers to assess earnings sustainability.

A structured approach to strengthen the deal story

Creating an efficient and credible sell-side process is an enabler of enhanced business value.  

Based on our experience, here are a few key takeaways for businesses:  

• Validating historical financials: Digital tools are essential in organising fragmented financial information into a clear and credible format that buyers can understand and trust. They also explain the key drivers behind performance, enhancing management confidence in the value of their business. Overall, this is crucial to responding better to due diligence questions from buyers, and enhancing the owner’s negotiating position.  

• Improving the consistency of the narrative with a compelling business growth story: Communications with buyers need to be consistent and compelling, with clear evidence of the quality and sustainability of the company’s earnings for a valuation that reflects the business’s full worth. Ensure that business performance, profitability, and value drivers are articulated clearly throughout the sell-side process. 

• Managing risks upfront: Issues around accounting for business income and expenses and impact of exchange rate fluctuations on earnings need to be identified and clarified upfront, so they can be reflected appropriately and explained early during the process. 
  
  This reduces uncertainty and minimises disruption to the business. More importantly, it enhances trust by presenting a more balanced view of earnings to improve valuation potential.

Driving better M&A outcomes 

Owners considering a sale should be mindful that buyers today are more sophisticated and have a lower tolerance for gaps in information, inconsistencies, or uncertainties. Proper preparation, with the support of an advisor increases the chances of a successful deal. This is achievable by improving efficiency, strengthening credibility and increasing buyer confidence, reducing execution risk, and defending the owners’ expectations.  
 
At PwC, we support entrepreneurs, founders, and family-owned businesses during the early stages of an M&A, and through the moments that matter most, across the M&A lifecycle.  

Speak to us on how you can navigate complexity, maintain momentum, and present a value story the market can trust.