Screening for M&A Targets?
Hey, question here. What tools do you use when trying to find private companies, subsidiaries / segments, etc that would make for a good acquisition target? Do you use CapIQ? Or does that mostly just have data on publicly traded companies?
Thanks!
Heytherecougar, while CapIQ does have some private company info, it mostly has public company info. If you're putting together a list of private companies, your best bet might be to use an industry association's member directory online as a starting point.
How would you then find figures like EBITDA from that? Reach out to companies, or find somewhere online?
In my experience it is very difficult to find information on private companies' EBITDA and other financial metrics. Typically the senior professionals will be familiar with the major private players, and use investment bankers as a source for 'gossip' around which companies are active, how they are doing, etc. It's very much a networking game on the private side, although it is sometimes possible to piece together a private company's financial picture by doing a lot of research and making general assumptions about the business.
As NuckFuts stated, it's going to be very difficult (if not impossible). CapIQ sometimes has these numbers, but they do not provide a first-hand source for them. Hoovers, Manta, and some other website will also have some financial information, but those are not completely reliable sources, nor do they provide sources for their claimed financials.
If you're putting together some buyside acquisitions list for an internship, you're not going to find much on the financial side, but your bankers should know this.
how do m&a advisors research and identify targets (Originally Posted: 01/25/2010)
So I was just wondering, as you may have noticed in a previous posting how this is done.
Basically, will they identify targets that fit in well for an acquisition, or only targets that fit in well and may possibly be up for sale? Can it also be anyone who is out there, as everyone has a mprice I guess?
Also how is the research done in finding these targets, are databases of public info then searched etc etc?
In my experiences, an M&A firm advising on the buyside is rarer and only engaged if the transaction is large and the buyer is looking for someone to really broker the deal for them...
I think if a client does approach a ibank requesting acquisition targets, they've usually got something in mind and can point the bank in the direction / industry they're thinking... again, without competitive guidance from management, it's difficult to really identify small private companies.
Again, if a company is being sold and a strategic is contacted for a bid, then the strategic may do the work on their own if it isnt a material transaction and doesnt require more work, ie debt raise / equity raise. If the merger / acquisition is large comparitive to the acquiror, the chances are they will engage a bank to help with the merger / acquisition scenario, diligence, debt/equity raise and manage the risk associated with acquisition. Last thing they want is to be insolvant because they didnt want to pay fees to a bank...
Thanks mezzket
So then wjat about corporate development teams looking to make acquisitions. How do you think they go through this process of finding targets?
Best source to find list of small companies as acquisition targets (Originally Posted: 03/13/2018)
What would be the best platform / database / service to find companies that are mostly valued under $5 million? Finding financial information on these companies isn't so important at this stage, as it is already tough to simply create a target list of such companies since their public presence is very limited. The specific industry is energy, electricity and utility services.
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