Do your plans call for acquiring a company in the foreseeable future? If your answer is yes, be sure to read and respond to this blog. It could be the difference between buying the right company and not seeing any deals.
Are you an active or passive buyer? On a scale of 1 to 10, where would you rank your current acquisition interest? If you engaged a broker and you’re out hunting deals, the ranking is a 10. If you are looking for companies to buy on your own, that counts as active too. Action – email us your current acquisition criteria and we will let you know when we have any companies for sale that match your parameters. Also let us know if you have no interest in acquisitions so we don’t waste anyone’s time.
What size company are you looking to buy? Typically, financial buyers know exactly what size company they are looking for. They may have a minimum EBITDA requirement of $5 million, for example. An industry buyer may or may not know the size company they want to buy because size depends upon several converging factors including the selling company’s financial performance, the seller’s cash requirements, the strategic fit between the buyer and seller, and the buyer’s financing capabilities to name a few. Action – let us know what size transaction you are looking to make today.
Is there a particular market segment that you want to buy into? Market segment is arguably the most distinct factor to consider when acquiring a business. Are you looking to expand your presence in a particular segment of the market or are you trying to diversify your existing lines of business? It is our experience that most owners of commercial ARM companies, for example, are not looking to buy consumer agencies. Action – send us a prioritized list of all market segments that interest you and a list of market segments that don’t interest you.
Are you a cash buyer? We know this is a loaded question that depends in large part on the selling company’s performance and the selling owner’s willingness to accept a structured buyout that includes little or no cash at closing, an earnout based upon future performance, a seller’s note, and/or equity in the buyer’s company. We know that most sellers are risk adverse and want to maximize the cash payment at closing. Two actions. First, let us know how you prefer to structure your acquisitions and two, send us details about your financial capabilities. For example, perhaps you already have a credit line established to fund acquisitions or you have a private equity partne
What else interests you as a buyer? Perhaps you’re looking to buy a company with a proven near/offshore capability. Maybe you want only 3rd party collections. Maybe you want to buy a company with different service offering. Action – tell us what characteristics you are looking for and we will let you know what exists in today’s market for you to consider.
Beauty is in the eye of the beholder. We need to know what motivates you to acquire so we can show you the right deals. We look forward to hearing from you.