ABI works with both small businesses and mid-sized companies. At any point in time the number of companies formally on the market is as few as 3% to 5% of all companies. In addition, many more companies are available but are not formally on the market. This is known as the hidden market.
ABI’s Buy-Side Advisory Services are designed to help acquirers access the hidden market. In addition, where an acquirer and a seller have already been connected with each other, we can assist with the complexities of successfully transferring the company to new ownership.
Three Types of Buy-Side Clients
Entrepreneurs – Buyers interested in replacing a job or other source of income fall into this category.
Investors – Investor clients, such as private equity groups or high net worth individuals, are interested in acquiring companies which can provide attractive financial returns on their investment such as through making operational improvements, or by providing increased access to capital. Many times an investor-acquired company will serve as a platform for growth or as an add-on to a platform company. Platform companies within institutional investor portfolios can also be considered strategic buyers where the goals of the strategic buyer ultimately accrue to the financial benefit of the investor.
Companies – This group of buyers consists of corporate or smaller-company clients seeking to acquire a company to achieve growth or other strategic objectives
Client Services and Benefits
While large corporate or investor groups may have teams dedicated to searching for and acquiring companies, most smaller organizations or individuals do not have the resources or ongoing need to justify that level of commitment. The aim of ABI’s Buy-Side Advisory Services offering is to support this second group. We do this with the following services:
- Acquisition Criteria Development – A profile of a desirable ‘acquisition target’ must be drafted together with the client which will ultimately guide the managed search
- Opinion of value and market analysis – Help the Buyer determine the value range of targeted businesses
- Buyer Positioning and Mentoring – Develop a positioning strategy to place the buyer client in a favorable light and continue in an ongoing advisory role
- Managed Search – Identify, contact, screen and evaluate acquisition candidate companies, arrange confidential introductions, help structure the offer and negotiate terms
- Transaction Management – Oversee and support due diligence and closing of the transaction
- Financing Assistance – Introduce Buyer to lenders and guide through process of loan application, required seller documentation, approval, securing of funds.
The benefits of these services to our clients include:
- Overcome high buyer-failure rate while increasing the likelihood of a successful post-close integration with an existing company
- Maximize confidentiality, credibility and professionalism
- Provide access to a broader market and an increased, proprietary ‘deal flow’
- Reduced competition for acquisition targets
- Better, more effective use of buy-side client time and money preventing distraction from core business
- Access to appropriate specialty advisors such as attorneys and accountants
