Six Smart Ways to Conduct a Buy-Side Acquisition Search
If you’re looking for a profitable M&A, how should you conduct your buy-side acquisition search to find the true bargains? Are they on Internet based “for sale” websites, where anyone and everyone can enter a bidding war?
No, the best opportunities are there for investors who don’t wait for the “for sale” sign to get posted.
Instead, they go hunting and engage in a buy-side acquisition search.
Unfortunately, far too many investors attack the market willy-nilly, instead of conducting a strategic, disciplined search. Here are some tips to help you succeed:
- Know thyself first. Before you give the green light to acquire another company, take a good hard look at yourself. What exactly are you looking for, and how will a new company complement your business. Read through my Acquisition Criteria for Investors.
- Find companies that are of more value to you than their owners. This may sound rather obvious, but as you analyze your potential prospects, remember that you’re looking for a win-win situation. The company you’re looking for might not even be for sale, but the owners may realize that you present a great opportunity for them. Given the right opportunity, they may consider your offer.
- Check with customers and competitors for a marketplace perspective. It’s amazing how much information can be accumulated via the Internet, but at some point you’ll need to reach out to competitors and customers. This will help provide you with a solid understanding of their place in the marketplace. It may even affect your offering price.
- Establish a face-to-face meeting. Even if the owner doesn’t want to sell, be sure to ask for an interview so you can introduce yourself. Establishing a relationship is the key for any sale, and considering that most M & As take over a year, built rapport is critical. If you present yourself as an option, the owner will always have you in the back of his mind, where you’ll be first on the list in the event of an unforeseen market turn.
- Target big businesses too. The big boys are always considering divestiture. If you see a bigger company that has a smaller unit, it doesn’t hurt to reach out to them and see if there is a possibility for a win-win situation.
- Bring in outside help. If this is outside your comfort zone, bring in a qualified professional who is discreet in buyer-side acquisition searches. The right consultant will not only help you find the right prospect, but will help you focus on your on-going business, while opening the door for relevant new opportunities.
Remember, a buy-side acquisition search should be considered a part of your business growth strategy. Organic search can take a long time to develop. If you have a core strategy in place, the right acquisition can produce accelerated and more profitable gains.
(Photo by carbonNYC)
If you're looking to make a strategic acqusition, download Rock LaManna's Free Acquisition Criteria for Printing Companies.Rock LaManna provides executive coaching for printing owners looking to grow their printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan.