Mike Rosendahl

E: mrosendahl@pcecompanies.com

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When you run a business, you already have a day job—and it doesn’t involve developing a list of potential buyers interested in purchasing or merging with your company. Creating a truly practical, valuable buyers list, however, is one of the most important parts of the mergers and acquisitions (M&A) process. Without the right buyers on your list, your odds of a successful sale decrease—and it’s hard to identify more than two or three qualified buyers without professional help.

Experienced M&A investment bankers have plenty of expertise in executing the thorough, deliberate process required to identify and research buyers that may be interested in acquiring or merging with your business. Their thoughtful approach to building a buyers list will increase your chances of maximizing the value of your transaction, meeting your objectives, and avoiding regrets over the sale of your business.

Read on to discover how an investment banker can help you narrow the field, expand your options, and prioritize the best possible buyers for your business.

Determining the Right Buyer Type

Some potential buyers may be interested in your business solely for the return they believe it will generate. Others may see it as a strategic fit with their existing businesses, and still others may wish to keep your company just as it is. Before beginning the process of building a buyers list, an investment banker will help you reflect on the following questions:

    • Do you plan to stay involved in the business?
    • Are particular family members or current employees capable of running the business?
    • Are there rival business owners who might be willing to pay a premium to eliminate your company as a competitor?
    • Do you prefer that certain companies remain unaware that your business is for sale?
    • Are there tangential sectors that would benefit from your products or services?
    • What consequences would employees face upon the sale of your company?

With the answers to questions like these, your investment banker will be able to advise whether you should consider a financial buyer or a strategic buyer for your business.

Expanding Your Network of Buyers

Experienced investment bankers have access to a vast network of possible buyers, ensuring that you have a wide pool of options. By leveraging their connections and knowledge to find the optimal buyer for your business, they can increase the likelihood of a successful sale. Your investment banker will help you:

    • Define the criteria for potential buyers. Determining the ideal purchaser for your company may include considering factors such as industry, size, location, financial stability, and strategic fit. A practiced investment banker narrows the search so you can focus only on the most relevant prospects.
    • Evaluate potential buyers. To determine whether a prospective buyer is a good fit for your company, this process may involve reviewing the company’s financials, analyzing its market position, and assessing its strategic goals.
    • Conduct market research. Your investment banker will use industry reports, trade publications, and databases to identify likely buyers that meet your specific criteria.
    • Network. Investment bankers attend industry conferences, trade shows, and events to network with interested parties. They may also contact industry associations and professional organizations to find buyers that are the right fit for your company.

Conducting Market Analysis

Understanding market trends and buyer behavior is crucial for building a strategic buyers list. Here’s how market analysis plays a vital role:

    • Identifying Potential Buyers. A comprehensive market analysis helps pinpoint who might be interested in acquiring your business. By examining industry reports and market data, an investment banker can identify companies expanding through acquisitions, private equity firms investing in similar businesses, and other strategic or financial buyers. This targeted approach ensures that the buyers list includes entities with a genuine interest and the financial capacity to make a purchase.
    • Understanding Market Trends. Market trends provide insight into what potential buyers are looking for. Are buyers focusing on specific sectors? Are there emerging trends or technologies driving acquisitions? By understanding these trends, investment bankers can position your business attractively to meet current market demands, enhancing the likelihood of a successful sale.
    • Competitive Analysis. Knowing your competition is key. A market analysis reveals which competitors are also looking to sell, which ones are potential buyers, and how your business compares to others in the market. This information allows you to highlight your business's unique strengths and position it effectively against competitors.
    • Valuation Insights. Market analysis provides a benchmark for valuing your business. By examining recent transactions, market conditions, and economic indicators, an investment banker can offer a realistic valuation range. This helps set appropriate expectations and guides negotiations with potential buyers.

Prioritizing Buyers for Your Business

Once you’ve created a list of would-be buyers, your investment banker will contact each one and track the responses of interested parties. Then the investment banker will:

    • Prioritize your list. Once you’ve evaluated your prospects, it’s time to prioritize the list based on factors such as their level of interest, financial strength, and strategic fit. This will help you and your investment banker focus on the most promising options and maximize your chances of a successful sale.
    • Develop a marketing plan. With your prioritized buyers list, the investment banker will develop a marketing plan for reaching out to potential buyers. This may involve creating marketing materials, identifying key decision-makers, and developing a strategy for outreach and follow-up.
    • Prepare confidentiality agreements. Finally, before sharing any sensitive business information, your investment banker will ensure that all would-be buyers sign a confidentiality agreement. This protects your business’s confidential information and ensures that sensitive info is not leaked to competitors.
Creating a buyers list is a complex process that requires a thorough understanding of the industry, financial markets, and strategic positioning. Working with an experienced M&A investment banker can help ensure that you find the right buyer and negotiate the best deal for your business.

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Michael Rosendahl


Michael Rosendahl

Investment Banking

New York Office

201-444-6280 Ext 1 (direct)


201-444-6280 Ext 1 (direct)

407-621-2199 (fax)