How does a Sell Side firm identify prospective buyers during an auction process?
Specifically, are there tools out there that help, or is this all about having a gut feeling which PE firms/strategic buyers "usually" operate in the sector? Once you have a teaser and is shopping it around, how confident are you typically that you've not left out (for example) a massive number of interested PE firms?
I suppose this is most relevant in the LMM given the number of firms that operate there.
You would use tools like CapIQ to screen for potential buyers. For example, you can screen for private equity firms with investments or interest in certain industries. You would also be monitoring transactions happening in the industry which would show you who the active buyers are. Also, bankers have relationships with private equity firms and may know of what certain firms are looking for.
Are there tools that go beyond just the industry filters? For example, wouldn't figuring out who has a portfolio company where the company would be strategic hard/time consuming?
Screens in CapIQ can get pretty detailed. You can screen for an industry, and add key words that should be present in the business description. It can be time consuming because the resulting list from this screen may have hundreds of companies on it.
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