Since these buyers are investors, they usually search for companies that are well-managed and have seasoned management teams in position. These buyers will scrutinize your financial statements extremely carefully searching for consistent profits and, preferably, profits growth.
What is a strategic buyer? These buyers are not simply investors. Instead, they are companies that are already in your business or a similar business. Their goal is to recognize business synergies from the businesses they acquire.
Time to Closing - Strategic Buyers. A strategic buyer's understanding of your industry helps it choose rather rapidly if your business is one it intends to purchase and has the cash or the banking relationships to close rapidly. Financial buyers are starting with no understanding of your industry and usually borrow to purchase businesses which takes time.
Retention of Management Team. Since of financial buyer is an investor with no experience in your industry, it is highly likely that it will stay your management team and other employees and will not close any of your homes. Strategic buyers, on the other hand, are well-versed in your industry and may have management personnel who can replace your management team and may have homes that can replace your homes.
Conclusion. Your merger & acquisition advisor will probably bring you Letters of Intent from both kinds of buyers. It is in your best interest to sit down with your merger & acquisition advisor and assess each of those Letters of Intent. As you do, evaluate each with the points made above in mind. This will go a long way in helping you select the most effective buyer for your business.
Credit history have always been essential in the assessment of professionals securing bid and performance bonds. Today they are even more essential since a number of bonding programs we provide use the personal credit history as a primary basis for the bond approval.