The buyer that emerged from the list when we sold Voyager came from the U.S. Recently, when we marketed 5i Limited we spoke to companies in the U.S., Europe, India and the Middle East although the final buyer was from the U.K.
You should think globally and consider wether there are buyers abroad. Contacting people abroad is now relatively easy in this Internet age. Social and business network connections may assist. Often M & A companies have “ partner” companies in other countries.
One of the first tasks is to sit down with your chosen M & A adviser and create lists of possible purchasers. These will include competitors ( especially those that are known to be on a buy and build strategy – consolidators ), complementary companies ( e.g. for Voyager and 5i – Telco’s, System’s Integrators and Internet Service providers – diversifiers ) and converging companies ( companies that see industries converging and want to combine skills – convergers ). Initially my advice is to cast the net wide and then refine it down later.
When you have a list you want to rank them by various criteria. In so doing you want to “ qualify “ companies. Are you a good fit for them ? ( at least from where you sit ). Are they in acquisition mode ? Do they have money or do they look like they could raise money ? ( Basically are THEY a good business with good people ? ).
Is the timing right for them ? ( You will often find that, for some reason e.g. they are just completing another acquisition or the Managing Director has just changed, they are just not “ in the zone” for acquiring. )
You will add details to your list – contacts, decision makers, email addresses, phone numbers etc etc
You will discuss these lists adding and taking away people as you go.
This list is going to be the basis for the mailing out of your “ Teaser “. It will be a living thing until you get into detailed negotiations with your chosen acquirer.
With such a list you will hopefully cover all the possible people that might be interested in your business and then create competition between the most interested parties.
This is what you want – competition and choice for yourself.
This blog post is a part of a series of posts describing The Sales Process – you can access the other parts of the series from the links below:
- Making the decision
- Alternative Options to an exit by trade sale
- Getting ready to sell
- Finding an M & A Adviser – The Beauty Parade !!
- Who/where are the buyers
- “The Teaser”
- Prioritising Interest
- The Sale Document – your greatest ever sales proposal
- Negotiations and Heads of Terms
- Due Diligence
- Closing the deal
- Objective Parties