Conversely, the buyer knows very early what type of character the owner has and has time to get intimately familiar with the business and management team running the business. A seller that does will not have the selling price at the top of his list when the time to sell comes around. A business owner seeking top dollar and who does not necessarily care what type of buyer he sells to will probably not put in the effort to build a relationship for years. This gives experienced serial acquirers two distinct advantages, adverse selection and a deep insight into the people running the business.īy establishing a relationship well in advance of an owner considering selling his business, both parties can feel each other out, get to know each other, and decide if they are the types of people that could do business together. This is very different than a structured process where brokers and advisors run auctions, with a limited due diligence period and often seeking the highest price possible. The best serial acquirers have often been in talks or had relationships with the seller for years before a deal even is on the table. Like students of Constellation Software might have learned, acquiring SMBs takes a lot of time, discipline, and relationship building. What was clear from all companies attending, is that the way they approach M&A is very different than most public companies.
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