Four Types of M&A Buyers for your Business

Four Types of M&A Buyers for your Business

Selling your business can be one of the most difficult decisions you will ever make, but it can also be one of the most rewarding. It requires a great deal of planning and a significant amount of time. The better prepared you are the easier this transition will be.

Finding the right buyer to take over and successfully run your business is the ultimate goal. Each type of buyer has their own objective and finding the buyer that matches the long-term vision you have for your company is important.


Four Main Types of Buyers


  1. Strategic Buyers– A strategic buyer already owns a business in the same industry as the business they intend to buy. They are looking to grow their current business through acquisition or to add accompanying products or services in the same market. Strategic buyers are willing to pay the highest multiples. They have a great deal of industry knowledge and are perceptive to the companies that will help them create long term value.


  1. Financial Buyers – Financial buyers are generally a group of investors who purchase a business to invest in and eventually resell. A common type of financial buyer is a Private Equity Group (PEG). PEGs typically invest in businesses with over $5,000,000 in revenue with the thought of reselling in three to seven years.


  1. Synergistic Buyers – Synergistic buyers seeks to acquire another company in order to leverage its existing organization such as its administrative platform, sales channels and management team.


  1. Individual Buyers – Individual buyers are typically looking to purchase a Main Street or Lower Middle Market business. These are buyers who have previously owned a business or have been in corporate America and want to branch out by running a business of their own. This type of buyer is oftentimes considered an owner operator as they may be very involved in the day to day running of the business.


Selling Your Business to the Right Buyer


Understanding the types of M&A buyers and their motivations and capabilities will help ensure your business is sold to the most suitable buyer. A good M&A advisor can help you maneuver through this process. They will vet out all buyers only pursuing those that are a good fit for your company. The M&A team at Transitions In Business is here to help. Contact us today at 952-469-2540 for a free consultation to see how we can confidentially sell your business to the right buyer.