Reinebach: Know Your Market

August 11, 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, and within seconds you’re looking at relevant results.

But try figuring out who focuses on M&A at a specific corporation, and not surprisingly the task is much more daunting. True, at large companies like Cisco and Microsoft, there are specific people who head acquisition efforts and have titles to reflect it. These people typically advertise their contact details and often speak at industry events. But for the majority of companies in the middle market, ‘acquisition seekers’ are much more elusive. Sometimes the best contact is the VP of business development, other times it’s a C-suite executive, such as a CFO.

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 advisers, 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

adam.reinebach@sourcemedia.com