Identifying potential buyers
All answers are for general guidance only. Each case must be handled on individual facts.
Q: How can I identify potential buyers for the company using specialist brokers or market research?
It almost goes without saying that you are not going to sell the company twice so it is imperative that you make the best price and this, in turn, is all about finding the right potential buyers in the market.
The task of identifying potential buyers is invariably a team effort with the vendor management team knowing the likely competitors and the movers/shakers in their market and the corporate finance (CF) advisory team providing the raw market research concerning other prospective players. Acquisitions take place for many and varied reasons and you just may attract a better premium from a company that is keen to break into your market sector than you will from an established player.
It is also important to use your specialist CF advisory team to fully research the vendors list of prospects. The whole subject of sharing potentially commercially sensitive data about your company with your competitors is fraught (even with the benefit confidentiality agreement) and often emotional so it is pointless doing so with a competitor that lacks the balance sheet strength and resources to do the deal. The “will” to do the deal is not the same as the “ability” to do it.
Any CF advisory team worthy of the title will have access to subscription based research tools which will help them to advise you on the financial strength of the prospective buyer list, where appropriate the details of overseas players in the same market sector and of merger/acquisition deals in your market space. Before you choose your CF advisor you might even consider asking them what research tools they have at their disposal?
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