Help Needed!!! Buyer Lists

Honestly I feel like buyer lists can still be a challenge for me. Is this the same for others? I'd really appreciate any guidance on how analysts / associates tackle these.

Here's my process:

For strategics, I go on CIQ, filter by industry and a few buzzwords in business descriptions. I set the total revenue is greater than 0, and select the US for geography. This usually yields hundreds of businesses, which I then skim business descriptions and weed out candidates that are obviously unrelated. Once I find a lot of "maybes," I then start going on their websites. If they're a public company, it's easy to tell if they're big enough to purchase. If they're private, I try to find size indicators (i.e. how many locations). 

For sponsors, I use pitchbook. I find that sponsors list tons of industries they "invest in" on CIQ, so it's not super helpful. I select the correct industry and throw in some business description buzzwords. This usually yields ~100, which isn't too bad to look through. I then make sure each firm that I include has enough dry powder to do the deal. I'll then search for similar PE backed companies and see if I can find any sponsors that way by clicking on their investors.

I always feel like this process takes longer than it should. How do other people create buyer lists? Any advice on streamlining this process? 

Comments (8)

Dec 22, 2021 - 7:17pm
WSO Monkey Bot, what's your opinion? Comment below:
Dec 26, 2021 - 8:54am
tellmehowtoplay, what's your opinion? Comment below:

interested to know how others do it 

  • Analyst 2 in IB - Gen
Dec 26, 2021 - 10:31am

Are most folks (analysts and associates) making buyers list from scratch? Genuinely curious what the experience is like across the street. 

Being in a TMT M&A group at an EB myself, I would say from a buyers list perspective for the most part they come from books/materials on similar assets or if truly a new bespoke process my VPs or MDs will tick through old buyers lists to make a new buyers list. 

Most Helpful
Dec 27, 2021 - 11:37am
QuiltEmerson, what's your opinion? Comment below:

We have an exhaustive list for financial buyers which will be determined by ticket size and industry. After a while you get to know the different funds through processes so that you know what they are looking for, but the general attitude for financials is always that they want to see every deal that is a «maybe». 

For strategics, I think CapIQ is more frustrating than helpful, especially if it´s a niche company. You´ll get mostly conglomerates that are interested in every industry, and there is so many irrelevant buyers that the good ones almost drown in it. I think Mergermarket is better, especially if you start to look at similar deals.

Let´s say you are looking at an industrial product company. These are the steps I´d normally go through if I have to prepare something for a pitch:

1. Read up on the company website to learn about my pitch company. I want to know about their customers and suppliers, where they sit in the value chain, and the type of work that they do. If the company is not listed, I will try to find some public peers and see what they highlight in their presentations, in particular within M&A. Use ctrl+f on «organic/inorganic», «M&A», etc. to quickly find the right pages.  

2. Go to Mergermarket and start looking at the deals that my pitch company has done, or that some of the public peers have done. Even if this does yield some good results I always use the «find similar deals» function, or look at the deals done in the broader industrial codes. This will give you a broader understanding about what is going on in the industry. I´ll also pull the multiples for various of these searches, and then we´ll go with the one that is closest to what my MD believes is the «correct» multiple. 

3. Use CapIQ Pro and look up the client company. If that does not yield any good results I´ll use the «free text» field. Let´s say our potential client is a supplier of valves for the petrochemical industry. I´ll try any combination of petrochemical AND valves, petrochemical AND piping, etc. If that does not work, I´ll use energy -> O&G supplier as the industry, and the free text valves or any adjacent products that are used in combination. You can also try searching for negative combinations; O&G NOT oilservice, as we are only looking at product companies. 

4. Search for your company and the public comps in newspapers and publications by interest organizations. What are the general trends, are there any of their competitors that have recently been bought etc. This can potentially be a talking point in pitch meetings, so make sure you read about the details. If their main competitor has just been sold, and you miss it, you´ll look rather clueless for someone who´s supposed to know «everything» about what´s going on in the M&A market. 

You always have to work with what you´ve got, and the larger (listed) companies are easier to work with than the small superniche players. If it is the latter, I have sometimes called the customer service to complain about a product that their competitor has made. When they ask which one, I´ll tell them that I can´t remember, or stutter some letters, before letting them finalize and suggest a few and then tell them «that´s the one» and asking if they can transfer me. Just make sure your phone number is not linked to your bank and you should be good. 

I don't know... Yeah. Almost definitely yes.

  • 6
Dec 27, 2021 - 12:14pm
StrategyJunkie, what's your opinion? Comment below:

Aperiam dolor incidunt repudiandae id ut. Ut eveniet modi sequi sint dolores consequuntur voluptatem.

Omnis tenetur quisquam delectus nemo. At facere rerum est a. Impedit minus laboriosam laborum magnam molestiae eum repellat. Repellendus vero porro perspiciatis aut est aliquam saepe. Architecto dicta deleniti voluptatem sed. Eum optio nam iste dolores tempore veniam et labore.

Sunt consequuntur veniam molestiae sunt. Dolores provident et sunt. Iusto omnis sit sint cum cumque commodi corporis.

Start Discussion

Popular Content See all

Total Avg Compensation

May 2022 Investment Banking

  • Director/MD (9) $661
  • Vice President (36) $393
  • Associates (180) $246
  • 2nd Year Analyst (109) $161
  • 3rd+ Year Analyst (17) $156
  • 1st Year Analyst (348) $148
  • Intern/Summer Associate (73) $146
  • Intern/Summer Analyst (272) $91