Key Characteristics of a Successful Buy-Side Search

|Buy-Side Engagements

Know what you want.
Finding the right acquisition target is like dating: if you know exactly what you want, you’re more likely to find it. When companies retain BAMA on a buy-side search (helping them find and acquire companies that are typically not on the market), they often can’t fully articulate the characteristics of their ideal target. If we don’t dig in and nail this down, it makes the search difficult because direction is very loose on what a “perfect fit” looks like. If BAMA doesn’t have specific criteria, it’s shooting in the dark. If you’re ready to grow through acquisition, take some time to nail down the characteristics of your ideal target. This will keep the search focused.

It’s a numbers game.
When a buy-side client engages BAMA to find a company they’ll buy, the process unearths 100-200 companies matching their desired criteria. Of these 100-200 companies, the average response rate tells us about 20% of those companies are ready for a sale.

This means 20-40 companies are ready to pursue discussions with a buyer prospect in a relatively short window. It’s time-consuming for a buy-side client to review this many targets. If a client is able to articulate the most important requirements in their search, both sides can save time and keep the client focused on the Tier 1 prospects.

Time upfront makes for a better result.
There are many things to consider before beginning a buy-side search. BAMA has a list of 20+ questions that we use to help clients nail down their ideal buy-side targets. Here are 3 of them:

  • What specific products/services are you interested in or NOT interested in? Knowing what you DON’T want can be just as valuable as knowing what you DO.
  • Do you have a specific geographic search parameter?
  • What level of customer concentration (percentage of total revenue from a single customer) are you comfortable with in the business you will acquire?

Spend the time up front to detail your search and the results will be significantly more focused and the targets more in-line with your ideal acquisition.

Want to talk to BAMA about retained buy-side services including timeline, activities in your ideal market, cost and results of past engagements? Feel free to call our office: 704-295-0102.

If you're interested in joining TEAM BAMA, please submit a resume and cover letter telling us why you'd make a great addition to our pride.

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