Mirus Capital AdvisorsMirus Capital Advisors

Mergers and Acquisitions, Buying a Business

Be the (right) buyer

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“I’m going to give you a little advice. There’s a force in the universe that makes things happen; all you have to do is get in touch with it. Stop thinking…let things happen…and be…the ball.” – Ty Webb to Danny Noonan (Caddyshack, 1980)

There’s a lot written on how sellers can “find the right buyer”, and “tips to find a buyer” but how should a buyer think about this process? Are there strategies buyers can employ to position themselves as the right buyer to a seller?

Notwithstanding Ty’s advice to Danny, we rarely advise clients to “stop thinking”. Thinking through how a seller perceives your firm’s brand, capabilities, reach, culture, career opportunities, client base, and offer value / structure is key to success.  Presenting the firm to a seller in a way which addresses some of the seller’s most immediate concerns can be an important first step.  Developing a rapport, identifying the seller’s key objectives in a potential transaction, demonstrating your ability to get a deal done and building confidence with a seller are all must-do steps.  Planning helps a lot, but at some point you’ve got to really engage with the seller. If you’re running a buy-side process, that may mean engaging with a number of potential targets and their advisors. “Letting things happen” by participating in the calls, taking the meetings, seeing where the discussions lead you is when the rubber hits the road.  You quickly learn who is serious and who is not. Which companies are really doing what they say and which are presenting themselves aspirationally (to be kind).

We benefit from being on the sellside in a number of transactions, where we see how sellers evaluate buyers.  With multiple interested parties, how do sellers choose?  Often, it comes down to price, but in the process, strategic fit, cultural fit, buyer behavior in other deals, and other seller concerns are addressed by the best buyers and that gives the sellers a better sense of what the world will look like post transaction than bidders who do not spend time on these business and “softer” issues.  Put yourself in the shoes of the seller, really understand their concerns, timeline, expectations, and decision processes (or as Ty said, “be the ball”). It is well worth the effort and, in my experience, leads to better outcomes for buyers.

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Alan Fullerton is a partner with Mirus Capital Advisors. He works with owners of middle market businesses and can be reached at fullerton@merger.com.