Topic 5
Deal Sourcing
Deals can be sourced from formal or informal solicitation activity on your part or from unsolicited approaches from a variety of outside sources. Like most things, however, you get what you pay for.
POTENTIAL SOURCES, PROS AND CONS
- Potential deal opportunities can arise from targeted corporate development initiatives and mandates, research and development (R&D) efforts, internal skunk works, or unsolicited approaches from:
- Employees
- Commercial banks
- Investment banks
- Venture capital firms
- Investment management funds
- Lawyers
- Customers
- Accountants
- Competitors
- Search firms and brokers
- Contacts made from attending deal seminars and conferences
- Strategy, segment, and target identification work (see Topic 1)
- Third-party targeted deal sourcing–related engagement services are provided by investment banks; acquisition intermediaries, search firms and agents and brokers; accounting firms, and others. Services can range from and include:
- Assistance in developing acquisition criteria and strategic rationale
- Names of sellers or buyers that appear to meet a specific or general criteria
- Targeted searches and qualified contacts of sellers or buyers that meet a specific or general criteria
- Valuations and/or due diligence
- Full-service representation from criteria development, target search and qualification through valuation, conducting an auction, negotiation, and closing
- Determine the services you need based on your resources and deal flow interests.
- Often, it is less ...
