When you’re selling a business, who you sell it to matters. When Barnes International was headed for a sale, one of the potential buyers was a company in its industry.

In dealing with a strategic buyer in your company's industry, Barnes International's then-CEO David Gollob says the first tranche of due diligence comes with requests for customer data, margins and related information. There's typically an urgency, or at least a desire to keep the momentum going, so sellers might race to add the requested information to the data room. But sellers might want to step back before rushing to answer every request.

"You have to balance that desire to, 'Oh we've got a deal, let's race to the finish line,' with the downside risk of it blowing up," he says.

Crazy things happen in a deal, he says, so there should be some concern regarding the downside risk. In Gollob's case, rather than give the suitor the customer list, they instead provided an "a through z" as opposed to actual names.

"You can work through the data without giving it to the point where it could be used against you if the deal doesn't go through," Gollob  says. "That's a balancing act that you have to work through, and it's situation by situation."

He says the potential acquirer also wanted to talk directly to the company's customer base. He declined, saying it wasn't going to happen until it's clear that there's funding and everything is set.

"Because the last thing you want to do is tip your hand to your customer base and get them nervous," he says. "Then then there's blood in the water and your competitors start making noise. So, all those things you have to be very sensitive to."

Complicating the deal, he says the strategic buyer brought in a PE financial backer, which meant it wasn't clear where the requests were coming from, and he wanted to be able to speak to his counterpart in the deal.

"As the owner that's selling, you want to have that relationship with the top person, the ultimate decision maker, because ultimately you're going to run into a challenge and the lawyers aren't going to be able to figure it out or the CPAs aren't going to be able to figure it out and everybody's digging in and ultimately then it comes to the two decision makers to say either we're going to get over this, we're going to split it in half and both take some pain, we're going to do something, but you have to have that that counterpart," Gollob says.

During the deal, he says his team had frequently gotten requests to respond to detailed due diligence questions that could take time to answer. Then, suddenly, the other side went silent for 48 hours near the deadline. Gollob says he struggled to get a hold of someone to find out what was going on until he reached someone who told him there was a problem on the buyer side — there was an open case that had been overlooked that caused some trepidation and threatened to crater the deal. Ultimately, it was patched over with insurance products that could cover the exposure.

"But that's just an example of not knowing who to talk to as well as another example of there will always be something that hits you," he says. "I don't think (I) have ever had a deal that didn't have those war stories. But you have to have that counterpart where you can figure your way through, because if you want the deal and the other side wants to deal, there is a solution. You just got to be able to work through it."

Gollob, along with BKD's Thomas Murtagh, Orbus' Simon Perutz, and Levenfeld Pearlstein's David Solomon spoke at last year's Chicago Smart Business Dealmakers Conference about how uncertain times have dramatically impacted how to understand the strategic goals of strategic and financial buyers, and what that means for sellers. Hit play to catch the full panel discussion.