The importance of identifying active acquirers
Many business owners believe they can sell their business on their own, without using the services of an M&A adviser. That may be the case; however, this viewpoint fails to consider the negative effect on the business that the process of selling and the time it takes will have. Whilst a business owner could potentially sell without specialist advice, it’s highly likely that the eventual value received will be much lower – indeed, without an experienced M&A research, marketing and negotiating team behind them, it almost certainly will be.
So, away from the obvious marketing and negotiating capabilities to attract more buyers and drive up bids as a result, the capacity to identify potential purchasers is a hugely important aspect of securing a deal, which business owners often feel is an easy task to undertake.
The ‘obvious’ place to start when researching potential purchasers is establishing which buyers have previously purchased companies occupying a similar space, as many will remain on the lookout for bolt-on opportunities. Although much historical information regarding acquisitions is readily available on the Internet, it simply doesn’t scratch the surface. Many deals remain undisclosed, with only the exiting business owner, the acquirer and their respective legal advisers being aware of the sale.
Coupled with acquirers continuing to monitor for further acquisitions, the data surrounding historical deals involving similar companies can also be of huge benefit come the negotiation phase of the process. Analysing deals and the values and multiples paid affords the sell-side negotiators an outline value range from which to negotiate towards and above.
Benchmark International has built up a valuable reserve of such information, which is continually updated and managed via our powerful, in-house acquisitions management software, DealDesk Pro.
Active acquirers, along with carefully selected synergistic, strategic and financial acquirers, complete a comprehensive buyer list to which a company should be marketed. From there, marketing capabilities and skilled negotiation prowess takeover; however, with historical information regarding previous acquisitions also benefitting the wider process, the importance of active buyer information can not be understated.