This question is for those of you that actively seek out buyers and market your clients for sale. How do you get started on the process?
For context, I'm on the valuation and transaction advisory team at an accounting firm. We typically advise clients on the reasonability of offers they receive and conduct DD for M&A. However we just got a client who's motivated to exit and we would like to take this company through the entire deal process. My superiors think this is something we should already be doing, but we have not done it historically.
So how would a typical MM IB go about identifying potential buyers? Names of resources/services or just general advice would be greatly appreciated!
Curious as well.
Not exhaustive and glosses over many details, but a few considerations are:
1) Seller Goals: Does the client want to stay in charge? Does the client know anything about the buyer landscape (have they ever been approached or do they have a preference on strategic vs. financial)? A process will be geared toward the goals of a client, so the initial information the client provides as to what type of process/buyer profile they're looking for will be key.
2) Compiling a buyer's list: Pretty simple but time-consuming task, just research PE funds and any potential strategics and put together a buyer's list. Best resource: PitchBook. Additional considerations: buyer strategy (would they be interested in this? does the PE group's potential strategy fit with your client's goals?) and buyer means (total check size would be 5% - 20% of fund size, so you have to screen for buyers accordingly).
3) Marketing the deal: Create CIM & Teaser, send out Teaser, sign NDAs, send CIMs, have a bunch of bullshit calls where PE buyers ask about stuff you already have in the CIM, then get initial bids. Afterwards, more presentations and shit, final bids, due diligence, etc... (I glossed over this cause there are specific threads that talk about the sell-side process in depth, if that is what you're looking for).
Not an exhaustive list, happy to go into more detail but this is the high level overview.
This is why the lower middle market has such a high process failure rate and valuation dispersion. I get it isn't your decision, but this seems like an irresponsible venture considering that your senior guys have no idea what they are doing in terms of running a sale process.
The post above me spells out basic steps fairly well, but the buyer's list is generated through various screens (CapIQ, Pitchbook, internal databases, sponsor coverage relationships, etc.). Larger (public, large private) buyers are always more difficult for smaller transactions because they are terribly uninterested in expending time and energy for something that will barely move the needle. At this level, the best strategics are often sponsor-backed.
Your team needs to get up to speed quickly on how to run a process, negotiate key M&A items, etc.
Yeah agreed - unusual situation for a client to provide a mandate without the firm having prior M&A experience
Utilize Capital IQ for strategic buyers and Pitchbook for financial buyers.
Dolores vero qui ut et. Error nemo illo aut vero eveniet natus repellat. Consectetur soluta amet laborum esse nihil.
Sequi possimus voluptas in adipisci excepturi aut. Eum excepturi optio voluptas placeat id iste. Sunt ducimus rem ab qui. Doloribus et et ad id debitis et. Qui adipisci voluptatem cupiditate voluptates. Fugit deleniti error ut.
Laborum enim ducimus quibusdam suscipit fuga praesentium blanditiis velit. Occaecati hic deserunt amet et qui reiciendis aspernatur. Omnis incidunt ut molestiae eius architecto debitis voluptatem. Voluptatem officiis quia et quisquam.
Eos saepe aspernatur esse omnis. In quos consequatur qui illum accusantium omnis vel velit. Corrupti nemo asperiores adipisci aliquam quia cupiditate reiciendis consequatur. Eos repudiandae nihil et culpa voluptatem doloribus soluta.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...