He understands what makes a business valuable, how to present that to buyers, and negotiate to maximize price and terms. We maintain a database of active strategic and financial group buyers. We thoroughly research both published and other sources. Participating in Industry activities assists in knowing who buyers are and how to contact them. We normally divide buyers into two categories - strategic and financial.
Strategic buyers are companies that can derive operational benefits from owning the business.
This can occur because of potentially higher revenues from a combination, potentially lower expenses by joining together, or a mixture of the two. Because of these perceived synergies, premium prices are often paid by strategic buyers. Financial buyers are more concerned with the return they can earn from the acquisition rather that the business in which the seller operates. Financial buyers are usually more flexible on providing management incentives, including partial ownership. There is a vast pool of money looking for middle market acquisitions among financial buyers.