Sell-side investment banks strategically guide companies through the selling process, identify and engage suitable buyers. Typical buyers include private equity groups, strategic buyers, and VCs. In this article, we discuss best practices to find potential buyers.

Why can finding buyers be challenging?

Buyers are motivated by a range of compelling factors. They actively seek opportunities to propel their own growth, expand market reach, and capitalize on emerging technologies and trends.

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Buyer goals need to align with the sellers' objectives. Finding buyers can be challenging because buyers don’t typically market that they are open to a merger or acquisition. Strategic buyers aim to benefit from the seller's products and capabilities, while competitors look to acquire market share. Financial buyers typically keep parts of their investment strategies undisclosed, when looking for the next scalable portfolio companies.

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Investment bank’s existing networks and relationships play a major role in the buyer search. Networks aren't always large enough to find an engaged buyer, which is why they are always combined with a quality business intelligence platform. Dynamic search capabilities enable reaching a wider pool of potential acquirers with less time spent on the market mapping process.

Best practices to find potential buyers

There are a few strategies investment banks use in finding buyers, driven by networks and data analysis.

Existing connections and networks

Existing relationships with corporate executives, PE firms, VCs, and other potential buyers help to find potential acquirers. Referrals are also a strong strategy to find prospective buyers. IBs have extensive records of possible buyers encountered through previous deals, events, and connections. Agile CRM systems enable swiftly identification of potential list of buyers.

Targeted market research

Targeted research is aimed to identify corporations or PE firms that align with the seller's criteria and capabilities they have. IBs collect data on the motivations and strategies of different types of buyers and identify potential buyers who would benefit from synergies with the selling company. There are many data sources to use for in-depth market research and company information. Possible buyers can also be identified through recent M&A news sites by looking at their recent deal activity. Financial news sites such as Bloomberg report current M&A news and motivators behind the deals.

Deal platforms

Agile online deal platforms, business intelligence tools and industry forums are good in expanding the pool of potential buyers. These platforms provide efficient tools to filter companies based on their characteristics, helping to build a buyers list quickly. Deal sourcing platforms also provide access to the key decision makers’ contacts on the buyers’ side.

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How to use Inven to find potential buyers

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Inven is an AI-based platform helping to find potential acquirers for sell-side mandates. M&A professionals can input search parameters and filters. Inven’s AI scans millions of data points from company websites, official government registers, news articles, blogs, social media and many other sources and combines all relevant companies and their data points in one place.

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Here are some tips to find potential buyers with Inven’s tool:

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  • Find PEs that operate in the industry

Inven finds companies backed by PE owners. By searching with keywords related to the business you’re selling, you can find PE buyers operating in these specific industries. 

  • Find PEs that are generalists

Inven’s search can find PE companies that are not industry focused. This means that they can be open for many different kinds of investment targets. 

  • Find PE backed companies and google their acquisition news

Inven finds companies from a specific industry with PE backing. From there, it is simple to research these companies’ websites for recent acquisition news.

  • Find strategic buyers from the same industry

Inven’s platform helps to find companies that operate in the same industry as the seller and create a market map. Find larger companies which have had M&A activity in the past to spot strategic buyers. 

  • Find family offices from specific industries

With Inven’s advanced search you can find family owned PE firms. This enables you to find family offices that are focused in the seller’s industry.

  • Find corporate buyers by filtering out small companies

Filtering out small companies from the seller’s industry makes finding large corporate strategic buyers simpler. 

Conclusion

Investment banks can leverage industry knowledge, networks, and targeted outreach to identify and engage potential buyers. Ending up with a suitable buyer sometimes requires the help of dynamic data analysis tools. 

AI based tools save a lot of M&A professionals’ time in building a buyers list. Merged with the IB’s comprehensive industry expertise, they ensure that a successful transaction is more likely to happen.

Want to know more about how to find potential buyers with Inven? Book a demo.

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