A successful outcome of a company sale depends significantly on a professional pre-selection of potential buyers. From our years of experience as M&A consultants we known that there are basically three groups of buyers to be approached with different intentions.

The most obvious group interested in corporate sales or succession planning are strategic investors. In their perspective on the acquisition is focused on customers, market share, geographic expansion (eg in an emerging market), portfolio diversification or due to the gain of valuable trademarks. The "strategists" is looking for a stable and well-functioning company that does not need huge action for improvement.

A different perspective is the one of financial investors, such as private equity firms (PEGs). Their expectation of an acquisition depends on their strategic orientation of high growth and profits in the following 2 - 5 years, like through the purchase of a non-profitable company. After this period a so-called. "Exit" is executed – the sale of the now restructured and value-added company. Thus an important role from the viewpoint of a financial investor is an intact and engaged management, which ensures the realization of the objectives set. Additional acquisitions, known as add-on investments are frequently one measure of PEGs, as the total value of a group is evaluated significantly higher than that of individual market players on time of exit. From our experience, financial investors are a very transparent, focused and highly responsive group that is often willing to pay higher prices than the strategic investors.

The third group to be considered are financial investors interested in a long term engagement like industrial holdings. Their targets mainly feature a large market share, good brand and a good reputation within a mature market. Thus they are gaining an increase in value of the company by additional acquisitions or geographic expansion within 5 - 10 years.

Our experience shows that the pre-selection of relevant interest groups is a key factor for a company’s sale process. In addition, you should be aware that each of the three potential buyers must be targeted and approached in their own suitable manner. Thanks to a well-developed strategy an optimized sale price by a most suitable buyer can be achieved. The foundation is an experienced consulting company that is able to offer such customized solutions to their clients.