Many who are considering buying a company rely on business for sale websites for potential acquisition candidates. Another option for individuals and organizations looking to buy a company includes hiring a business broker to perform an acquisition search. Business brokerage firms with buy-side acquisition programs typically charge an upfront fee to begin the search. This gives confirmation to the business broker that the buyer is serious about the search. It is also a sign that the buyer has money available to purchase a business if the search comes up with a successful candidate that meets the target criteria. The business broker assists in helping prepare a letter of intent on a business as well as assist in the due diligence. If the connection results in a successful transaction, the business broker is paid a success fee. The search criteria typically consists of the SIC code, revenue range, geographic range, and age of business. Databases are used to identify target companies.
For those that have hit a brick wall in regards to buying a company through conventional means should consider a business broker to represent them in their search. The business broker will assist in negotiations and the general process of the acquisition. They may also have business for sale comparables and have knowledge on how to creatively structure the transaction.
One of the best attributes of a buy side program is that the goal is to identify businesses that are not currently being marketed for sale. This means that you will not be competing with other potential business buyers. Taking an active approach to buying a company may uncover a hidden gem.
If you are interested in learning more about our Target Acquisition Program designed for high net worth individuals and companies, please give us a call for details.