Buyside M&A

A Free Look

Flatirons Capital Advisors loves finding the simplest, shortest and most efficient solutions for our clients’ desired outcomes. With our extensive knowledge of a broad range of industries and expansive relationships with strategic buyers across North America, in certain situations a possible solution for a business owner looking to retire or take some chips off the table is to take a buy-side approach to the sale. Understanding its limitations is critical, but with a buy-side approach:

– the buyer is our client and pays our fees

– a high-level description of the business owner’s operations is required

– a 30-minute conference call with our client and the business owner takes place to determine if next steps are warranted

Potential benefits to the business owner:

– a “Free Look” with a strategic buyer in the identical/similar industry

– gain insights and perspectives from a larger operator

– determine if improvements are needed before an ultimate exit

– the timeline to closing is typically shorter

– confidentiality is typically maintained because there’s less activity and correspondence with outside parties

Key disadvantages to the business owner:

– only one buyer is involved

– passing up the opportunity for multiple competing offers

– potentially missing the ultimate, highest offer

– not having an experienced M&A advisor by your side during every step of the sale process

Whether it’s a buy-side or sell-side engagement, a key part of Flatirons Capital Advisors’ expertise lies with identifying and maintaining relationships with key strategic buyers that have the cash on hand and are actively acquiring businesses in the same industry as the business owner’s operations.  This reduces the chances of deal fatigue and any surprises the buyer might have if they didn’t intimately understand the owner’s business/industry.  

The due diligence process/timeline is usually more efficient because the buyer understands the industry/business operations, thus reducing friction points and the time to close.  Further, it elevates the chances of a successful post-merger integration.  Finally, the business owner can feel confident with the ultimate sale price because in this highly competitive market these buyers understand they must present strong, fair-market-values up front in order to consistently complete acquisitions.

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