Who will buy my business? Is it important to look internationally for a buyer?

In our experience of selling hundreds of companies, the best deals have often come as a result of thoroughly researching both domestic and international markets to identify genuine strategically motivated buyers for our clients business. Key criteria when evaluating buyers is identifying those with a strategic fit, financial strength, and a credible track record of previous acquisitions. The best buyers match all these criteria. Ultimately a genuine strategic buyer is the party most likely to pay above standard market valuations.

A competitive sale process allows sellers to choose the buyer they feel represents the right mix of best value and best home

Creating the competitive tension needed to drive best price and terms is significantly enhanced with a qualified pool of several strategic buyers, each with a different mix of motives for acquisition. Some may be looking for international expansion, others wanting to diversify into new complementary areas, or expand their Intellectual Property (IP), gain access to your customers, or ‘acqui-hire’ your highly skilled employees. In each case, the buyers’ motives will directly impact their view of value.

If you create a market around your business in this way, present your business in the best possible light and invite offers from multiple parties, you should be able to generate a range of offers from parties who know they need to be competitive to be successful. It is important to consider all potential buyer types: in recent transactions at Initium, over 50% of our clients have sold to an overseas acquirer, and almost all attracted interest from overseas.

A competitive sale process allows sellers to choose the buyer they feel represents the right mix of best value and best home. To this end, the best buyer is not necessarily a buyer that was even known to our client at the beginning of a business sale process.