Finding and qualifying strategic buyers for a transaction can be a complex process that requires careful planning and execution. Here are some of the key steps that our Deal Team does in identifying and evaluating potential buyers for our M&A projects:

Step 1: We define the company’s objectives and criteria before we start looking for potential buyers, it’s important for us to have a clear understanding of what our client hopes to achieve through the transaction. Consideration includes:

– Why are you looking to sell your business?
– What are your financial goals?
– What type of buyer are you looking for?
– What are your non-financial goals (e.g. preserving jobs, maintaining the company culture)?

Once we have a clear understanding of our clients objectives, we can start to develop criteria for evaluating potential buyers. These criteria might include factors such as the buyer’s industry experience, financial strength, cultural fit, and strategic fit.

Step 2: Identify potential buyers: We use various methods to identify potential buyers, such as our own proprietary databases, industry databases, professional networks, and market research. We look for companies, private equity firms and family offices that are in a complementary focus or related industry and have a strategic interest in acquiring the business.

Step 3: Evaluate their financial position: Once we have identified potential buyers, we evaluate their financial position to ensure they are financially stable and can afford to acquire the business. Review their balance sheet, income statement, cash flow statement, and other financial metrics.

Step 4: Determine their strategic fit: We consider whether the potential buyer is a strategic fit for the business. Do they have a similar culture, values, and goals? Will the selling business complement theirs? Will the acquisition help them achieve their strategic objectives?

Step 5: Assess their acquisition experience: Look for potential buyers who have experience in acquiring businesses similar to the selling business. We ask for references and case studies of their past acquisitions to assess their track record.