Building a Target List: Sell Side M&A
What is a target list?
A target list is a list of companies, parties and individuals that you predict could likely have some interest in acquiring your business. A target list is used by your advisor in their process of confidentially approaching and understanding the initial interest of potential acquirers.
Who should you include in your target list?
Your target list should be comprehensive, including as many potential acquirers as possible. Generally it is worthwhile to consider including parties such as:
1. Your direct competitors
4. Similar businesses
5. High net worth individual investors
6. Private equity groups
When assessing who to include in your target list, it pays to consider what parties may gain strategic advantages (like economies of scale or cross selling opportunities) from acquiring your business.
Where do you source your targets from?
There are a number of market-leading database tools that your advisor should use to help you in compiling a target list of potential acquirers.
Tools like Company360 provide advisors with the ability to produce a list of competitor businesses in your industry from set geographic and financial parameters.
Other tools like Intralinks Dealnexus allow your advisor to scope out Private Equity groups who have indicated interest in making acquisitions in your industry.
On top of this, market intel and industry insight is generally invaluable in sourcing other parties who may show genuine interest in acquiring your business.
The larger the list the better
As a general rule, the larger your target list, the better chances you will have of finding a buyer who can successfully complete an acquisition.
Its important to not rule out those parties who may, at face-value, seem unlikely to have any interest in acquiring your business. The truth is, it is impossible to predict this without including them in your process and discussing the opportunity with them.
Find Out More
Quinn M&A’s expert transactional advisory team can help you compile a comprehensive target list as part of the execution of your business sale. Submit an Express Enquiry or call Quinn M&A on +612 9223 9166 to arrange a confidential no cost consultation with one of our Directors.