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Buy-side representation is directed by M&A intermediaries and business brokers, and can be beneficial to business buyers because it increases the chances of avoiding M&A stumbling blocks, and ensures that you – the buyer – are fairly represented. Why should you consider Buy-side representation?
To Help Find Hidden Companies
When business buyers are searching the market for new M&A opportunities, they will only see a small portion of the businesses that are listed for sale. In an effort to keep confidentiality, businesses for sale or interested in being acquired often rely on the “hidden market” – something that is only visible to M&A intermediaries and business brokers. Having buy-side representation will ensure that you have the opportunity to consider business acquisition opportunities that you may not have been able to access otherwise.
Buy-side representation also provides an opportunity for active marketing, in which your advisor will identify companies that fit your target profile, but have no intention to sell. The advisor will then reach out to the potential target to gauge their willingness to entertain an offer. While your advisor is searching for qualified targets, your identity is kept strictly confidential at this early stage, shielding you from your competitors as well as potential acquisitions.
For Stronger Negotiations
Deals often fall apart during the negotiation part of the M&A process, whether as a result of a disagreement about a purchase price, or due to the many other issues involved in a deal that must be worked out during the negotiation process. When a business buyer has buy-side representation, roadblocks and stumbling points in the negotiation can be more easily navigated, and as a result the M&A process will run more smoothly.
Referees During Negotiations
Your advisor will serve as the point of contact for both sides of the negotiation, and will utilize their professional knowledge to help your weigh the risks and benefits involved in each step of the decision making process. As an intermediary with years of professional negotiation experience, and with the ability to stay level-headed when emotions run hot in the deal, your advisor will be able to negotiate a better deal for both sides at a better price for you.
To Help Close the Deal
To close the deal, all parties must agree and satisfy all pre-outlined conditions and requirements. All necessary documentation is executed, and business ownership is transferred. At closing, the advisor works as an escrow agent, by holding deposits and funds from the buyer, and disbursing them to the seller (you can learn more about how escrow is used in the business market here). During the closing process, buy-side representation can give you security in knowing that all interested parties will be paid the appropriate amounts of funds given by the buyer.
If you are interested in hiring buy-side representation, please contact George & Company in Worcester, MA. As the prime Mergers and Acquisitions firm in New England’s second largest city, our knowledgeable agents are here to assist you in the business buying process, whether you are an experienced or first-time buyer.