Who will buy your business?

When it comes to selling a business, it's natural for shareholders to have reservations about approaching potential acquirers. Sometimes, the best buyer might not be the most obvious choice, and that’s where the expertise of an M&A advisor becomes invaluable. A significant aspect of what we do at Heligan Corporate Finance involves not only facilitating transactions but also introducing sellers to potential buyers they hadn't considered - or even known about - before.

During one of our recent pitches, we were asked: "How many of your transactions involved acquirers that were unknown to management at the time of engagement?" It’s an interesting metric because it highlights the breadth of our search and the depth of our industry connections. In the last few months alone, buyers not previously known to management were identified in five out of our last six transactions. Extending the timeline for a broader perspective, about half of our transactions historically involve buyers that were initially off the radar of the business’s management team.

This point raises an important discussion about the perception of potential buyers. Often, shareholders are quick to dismiss certain acquirers rather than consider who might be interested in their company and why. This isn't a criticism but rather an observation of common tendencies in the transaction planning process. Whether because of geographical distance, differing industry sectors, or simply not being visible on the usual radars, many potential acquirers are overlooked.

Moreover, if the company involved has private equity investors, the dynamic shifts slightly. An exit review would typically have been conducted early on, identifying a set of ‘core’ acquirers. However, as markets evolve, these core acquirers at the time of investment may no longer be as relevant, and new, previously unconsidered acquirers might emerge as significant prospects.

The key takeaway here is that shareholders often have more options than they are initially aware of. Whether these potential buyers are international firms, companies in adjacent sectors looking to diversify, or other types of investors, the pool of possible acquirers can be surprisingly vast.

Therefore, it's crucial for management and shareholders not to get bogged down in identifying who will buy their business as good M&A advisors are well equipped to uncover these opportunities. Instead, shareholders should focus on articulating a clear vision and strategy for their business. Remember, building a successful business is about more than just preparing for a sale - it's about crafting a robust strategy that fosters sustainable growth and value creation. At Heligan Corporate Finance, we're here to help illuminate these paths and guide you through the complex landscape of selling your business.