This blog post is part of an eBook on Strategies to Maximize Your M&A Deal Flow. You can download it for free here.
The world is changing at a breakneck pace, and mergers and acquisitions are no exception. With such big shifts in the political and economic landscape, dealmakers need to evolve their strategy to stay ahead.
According to a 2020 study conducted by Deloitte, 42% of respondents in the industry are exploring nontraditional M&A deals due to the current climate. That means approaches beyond M&A, such as joint ventures, special purpose acquisition companies (SPACs), alliances, and partnerships.
Offensive strategists are investing in technology, manufacturing, and financial services in an attempt to lay the groundwork for definitive leadership in the market.
And in order to keep up, experts are finding new and innovative ways to source deals that will give them an edge over the competition.
No business can close deals regularly unless they have a healthy pipeline to begin with. Below, we'll take a look at how to start building that pipeline so that you have plenty of prospects and deals to consider.
Finding an intermediary is a traditional way to close M&A deals that relies on networking and relationships. Investment bankers or business brokers will charge a percentage for the deal. One of the downsides? You're losing a good chunk of revenue through non-proprietary deal sourcing.
Finding an advisor is a good place to start if you're ready to move beyond traditional intermediaries. Buy-side advisors charge a retainer and lower percentage of the deal than an intermediary. This move could allow you to save money, those still not as much as proprietary deal sourcing.
Business listing sites allow you to easily find companies that are for sale. While some are free, most quality listing sites either charge success fees or subscription fees (such as Axial). Here are a few others to check out:
According to a 2019 study conducted by the International Institute of Business Analysis, 45% of professional associations saw membership grow, and for good reason. Membership association comes with a wide range of benefits, from greater access to resources and information to discounts on training and events.
Groups like the Association for Corporate Growth (ACG) are a great starting point from which to source M&A deals. For minimal dues, members can attend local events, global summits, and webinars. They also have the opportunity to sponsor events, contribute to discussions on public policy, and stay up-to-date on industry news and trends.
Making your presence visible in an industry you'd like to work with will help set your company apart from the pack. Consider joining other organizations in paying your dues, so you can attend events with your perfect target audience.
Not sure where to start? Here are just a few ideas that might be helpful:
Bring in M&A deals yourself instead of waiting for someone to do the work for you. This keeps you from depending on outside blockers and also saves a good chunk of money in the long run.
Advanced search engines allow you to find companies, qualify them, get up-to-date contact info, and reach out. This costs a subscription fee for the data and technology, but often tends to offer the highest quality deals at the lowest price point.
Taking a new approach to your deal flow may take some time upfront, but laying the groundwork will pay back in full later down the road.
Grata is a modern company search engine for proprietary deal sourcing and targeted B2B campaigns. Grata’s search engine enables you to find private companies by strategic fit: what they do, how they’re positioned, and the markets they target.
Break free from legacy databases and Google search and leverage NLP-driven search to find companies that are right for you. You can learn more about Grata by speaking with a member of our team. Get started here.