Over the years we have examined some of the key services and benefits that investment banking firms offer their clients. It is vital to look at these as all too often business owners make the mistake of assuming that, because they run a successful business, they will likewise be very successful in running an auction process for their business with potential buyers, without professional guidance.
Far too often this is not possible simply because the buyer universe is so vast that determining who to approach is daunting for most business owners. (not to mention the critical step of what documentation to approach buyers with!)
If you can navigate the former, the latter is nearly impossible for most given a lack of investment banking experience.
This is one reason that Generational Equity dealmakers are so successful: They have the ability to filter out the noise (i.e. non-optimal buyers) and create highly successful, very targeted buyer lists.
The value of this talent was recently pointed out in an article by our friends with Axial. Entitled, “Don’t Be a Basic Buyer”, it was written to provide advice to private equity firms as they approach investment banks with their purchase criteria. It reminded me of the key service our teams provide our clients: We eliminate the non-essential prospects and provide our clients with buyers who are optimal strategic fits for their businesses.
This may sound simple and logical, but the reality is there are hundreds of thousands of buyers of businesses spread throughout the world (we have 34K registered buyers in our database alone). Cutting through the “noise” that these buyers create is a vital service we provide to our clients.
In the article, the author “chides” some PE firms for the broad, very generic descriptions of what they are after, often sounding like this:
“We’re a new private equity fund with over $X million in committed capital. We’re looking for companies in North America with over $X million in EBITDA. We are a generalist firm that likes profitable businesses with strong management teams and a good growth strategy. Please reach out if you have any opportunities of interest.”
Axial’s point is this: How does an investment bank respond to such a generic description as that? And to make matters even worse, multiply that by 10-15 per day per banker and what do you get?
Emails full of useless data!!
Our deal teams, many of which have decades of collective experience deciphering PE “speak”, know that the best option, which is also the most time-consuming, is to maintain a living database of solid buyers by doing something old fashioned: Connecting with them!
This cannot be overstated; if you are working with an investment bank, M&A advisor, or local broker, be sure that they are not using a pre-created buyer list that they have been recycling for years and years without any targeted, strategic direction.
Which, by the way, is another good reason to avoid M&A specialists that only focus on a single industry – they are often rehashing the same buyer list over and over and over again, assuming the buyer will ONLY come from an insider-industry player.
Our dealmakers spend countless hours networking, talking, chatting, rubbing elbows, kissing babies, and dissecting PE speak to develop a keen understanding of what buyers are really after.
The behind the scenes value of this to you as a potential client is vital. On top of our one-on-one work the deal teams conduct, as a company we are committed to sponsoring and attending several ACG (Association for Corporate Growth) conventions every year.
These regional meetings (and the major annual meeting of all ACG chapters annually – called Intergrowth) are attended by literally thousands of potential buyers who our dealmakers meet with face-to-face to discuss mandates over a 3-4 day period. Although these ACG meetings are expensive to attend and sponsor, we find them to be invaluable in allowing us to glean vital information about potential buyers for our clients.
Again, one of the keys to our success is our proven ability to filter and target all buyer types for our clients, not just PE firms. We also do this for strategic buyers, international targets, FOGs (Family Office Groups), high net worth individuals and countless other potential buyer groups that exist.
Do filtering and targeting sound good to you as you consider your exit strategies? Do you even have an exit strategy or are you planning to take the first offer that comes along? No matter where you are on your exit journey, it is wise to partner with an investment banking firm that is dedicated to one goal: Successfully helping owners of privately held businesses transition to the next phase in their lives.
Here is what a few of our clients have told us about our success in targeting buyers for them:
Our program of success begins with education; we conduct complimentary exit planning workshops throughout North America where business owners just like you can learn a significant amount about exiting in an optimal fashion and at the same time, meet with our team of M&A professionals to discuss your specific needs.
And no matter what, hire an M&A team that can filter and target your buyers for an optimal transaction!
Carl Doerksen is the Director of Corporate Development at Generational Equity.
© 2021 Generational Equity, LLC All Rights Reserved
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!Andy Graham, Vice President, Modern Heating & Plumbing
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.Bryan D. Horn, Owner, Over Under Clothing
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
Dear Chris and Andre, I just wanted to say thanks for all your help. Even though this process was not an easy one, it was comforting to know that I had a capable team standing beside me. You made me feel like we were almost your only client or at least the most important one. Thanks again, and I will recommend your service in the future.Shenille Engelhart, Owner – CLS Technology
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.Michael J Polarek, President, Paragon Packaging
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!Eric Erlandson, Owner, Action Fastenings, Inc.
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”Karen S. Williams, CFO, BW Manufacturing
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.Michael J Polarek, President, Paragon Packaging
We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.Karen S. Williams, CFO, BW Manufacturing
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.Robert Evans, President and CEO of Mealtracker Dietary Software
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