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Corporate Dealmakers
August 4, 2008
If you’re shopping a healthcare company and want to find a few private equity professionals or investment bankers who focus on this area, it won’t take long to get started. Type in the right phrases on a search engine like Google, or search a news-rich site like www.mergersunleashed.com, and within seconds you’re looking at relevant results.
Strategic acquirors have always been important within the M&A market, but with financing terms still putting a lid on sponsor-backed deals, the value of corporate M&A pros—to advisors, lenders, and every service provider in the M&A world—is arguably higher than ever.
For the scores of firms targeting these contacts, the best option has been to access lists of corporate contacts through events, through publications like M&A Magazine and IDD Magazine, and through associations like ACG. The trick, in the spirit of knowing your customer, is to keep a few important things in mind:
- Most corporations are not serial acquirors. For many corporations, making an acquisition is a first-time and/or one-time event. That means drowning them in information is probably secondary to helping them get comfortable with the acquisition process.
- Most corporate dealmakers have regular day jobs. That means they are often pressed for time, and finding the next acquisition may fluctuate between the top and bottom of their priority list. That contrasts with a private equity firm, whose existence hinges upon its ability to find the next deal.
- Most corporate dealmakers are inundated with sales pitches. This is especially true for C-suite executives, who are solicited for everything from software programs to turnaround consulting services. Spamming them with a generic pitch about finding their next deal may not be effective.
The point is, since the corporate dealmaker market is loosely defined and presents some case-by-case obstacles, targeting your message is paramount—especially at a time when strategics are driving the deal market.
Adam Reinebach
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Reader Comments
Adam, As a 17 year vet of Corporate Development, having managed and closed 40 deals, I wanted to offer a couple of comments about your note. Most serial acquirers now have Corporate Development specialists (usually that title). Some use the confusing title of Business Development, which creates a problem since Business Development often means the senior national accounts sales rep as well. Another confusing part of Corp Dev titles is their disconnection from responsibilities. I've seen Directors as very senior people with extensive deal responsibility, and others with the same title two years out of college. The key is to find out who reports to the CEO or CFO and who has direct responsibility for deals. In larger groups, a direct report to the SVP of Corp Dev may have deal responsibility. The point is, if they own the deals they do, they're likely senior. If you want to find out who does Corporate Development, Capital IQ is a good source -- but it's just as effective to call the CEO or CFO's secretary and ask. Also, the best way to establish credibility with a prospective client is to take some time to know his/her business. A couple of smart questions will go a long way farther than a loose pitchbook. One new idea, different that the same 10 targets pitched in every other deal deck from the competition, is an enormous credibility builder. Corp Dev professionals are skeptical about bankers as "thanks for the fee, goodbye" types, so if you invest in learning your client's business, it pays off. Just a couple of thoughts. Good luck, Terry [Terence Bentley, October 3, 2008]
Adam, As a 17 year vet of Corporate Development, having managed and closed 40 deals, I wanted to offer a couple of comments about your note. Most serial acquirers now have Corporate Development specialists (usually that title). Some use the confusing title of Business Development, which creates a problem since Business Development often means the senior national accounts sales rep as well. Another confusing part of Corp Dev titles is their disconnection from responsibilities. I've seen Directors as very senior people with extensive deal responsibility, and others with the same title two years out of college. The key is to find out who reports to the CEO or CFO and who has direct responsibility for deals. In larger groups, a direct report to the SVP of Corp Dev may have deal responsibility. The point is, if they own the deals they do, they're likely senior. If you want to find out who does Corporate Development, Capital IQ is a good source -- but it's just as effective to call the CEO or CFO's secretary and ask. Also, the best way to establish credibility with a prospective client is to take some time to know his/her business. A couple of smart questions will go a long way farther than a loose pitchbook. One new idea, different that the same 10 targets pitched in every other deal deck from the competition, is an enormous credibility builder. Corp Dev professionals are skeptical about bankers as "thanks for the fee, goodbye" types, so if you invest in learning your client's business, it pays off. Just a couple of thoughts. Good luck, Terry [Terence Bentley, October 3, 2008]