Aug 23, 2023

Accelerating the Acquisition Process

Deciding to pursue an acquisition is a big first step in a long and challenging journey that surprisingly few complete. In fact, only 1 in 10 buyers that look at an opportunity attempt to pursue it with any vigor, and even fewer make it to the submission of an offer. Now you know why it can often be so difficult to get a broker’s attention (they don’t believe you’ll do anything!)

Consider all of the steps that it takes to identify, analyze, discuss, formulate, negotiate, and submit an offer are time-consuming and expensive and are all without any guarantee of the offer being accepted.

Quality businesses that are selling on the open market are heavily pursued often by private equity, family offices, and strategic buyers with millions if not billions of dollars they have to put to work. One cannot reasonably compete against buyers that can afford to overpay and have entire teams dedicated to analyzing and sealing the deal.

Hurdles the average individual buyer has to tackle:

1. A lack of deal flow - once you’ve exhausted a few listing sites and a couple of Google searches that mainly show restaurants, hotels, and subpar businesses, where do you look?

2. Impersonal - How do you learn about a business and build a relationship with the seller when it’s difficult to get through the broker and you can’t spend any time directly speaking with the seller?

3. Competitive - For any quality listed businesses, it’s very likely there are multiple options and offers in front of the seller. How do you avoid overpaying and differentiate yourself from the crowd?

4. Lack of experience/confidence - Structuring the transaction, mitigating risk, procuring financing, negotiating, maintaining momentum, and planning the transition are all key ingredients to a successful deal. Do you understand the complexities of putting a deal together and how to avoid pitfalls?

5. Limited time and resources to do this at scale - Don’t expect your first or second offer to work out. A buyer must be prepared to continually step up to the plate and keep swinging. How much time can you dedicate to the acquisition process?

With all of these issues working against most buyers, it can be daunting to even embark on the acquisition process.

How do you differentiate yourself and accelerate the process in order to avoid being in the 9 out of 10 buyers that never make an acquisition?

The best solution is to work with a trusted buy-side advisor who can employ an entire team on your behalf that can accelerate and guide you through the process:

1. Deal Flow - Leverage an existing network and a proven outreach process to introduce qualified, off-market deal flow at a faster pace than you could find on your own.

2. Off-Market Approach - Interact with these sellers on an off-market basis, providing time for you to connect personally with the seller and built rapport prior to submitting an offer. Doing so makes the process less transactional and increases the success rate.

3. Reasonable Offers - Avoid other bidders, extended negotiations, and auction processes.

4. Transaction Expertise - Rely on historical deal data, transaction structuring know-how, and when necessary, highly referred professional resources (CPAs, attorneys, etc.) all representing your best interests in completing the transaction.

5. An Outsourced Deal Team - Don’t go it alone - have a full team at your disposal whose sole purpose is to help you be successful.

If you would like to accelerate your acquisition process, pursue off-market transactions and leverage a team that can help you do this confidentially, efficiently, and, expertly.

Learn more about Calder’s buy-side services here.

About Calder Capital

Founded in 2013, Calder Capital, LLC is a lower middle market investment bank providing mergers and acquisitions advisory services to business owners, entrepreneurs, family offices, and investors across the United States. Our dedicated team of professionals combines extensive industry experience, technological innovation, negotiation savvy, and key relationships to exhibit exceptional execution. Calder’s services include mergers and acquisitions advisory, private funds and capital markets advisory, and business valuations.

Calder Capital

Partner

Information posted on this page is not intended to be, and should not be construed as tax, legal, investment or accounting advice. You should consult your own tax, legal, investment and accounting advisors before engaging in any transaction.