Insight

M&A: What Type of Buyer Is Your Target?

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As a Seller, it is important to consider the types of Buyers that may be interested in your business.  There are two primary types.  Strategic Buyers, as you might guess, have a strategic purpose for owning your business.  They may want to add it to another company they own or a portfolio of similar businesses they own, achieving complementary revenue growth or expense efficiencies.  They may plan the acquisition of your business as the best entry point for entering a new business.

The other type of Buyer is a Financial Buyer.  That is, a Buyer that is buying for the sole purpose of growing the business and ultimately selling it for a financial return.  Financial Buyers tend to be private equity firms and, increasingly, family offices.  And they could be local or regional groups of investors.

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David Traversi, Partner, Newport (david.traversi@newportllc.com)