There are three types of buyers for a business; financial and strategic buyers and Private Equity Groups (PEGs.) Financial buyers tend to be individual or small investor groups that wish to own and operate a business and will probably value a company based on an acceptable rate of return on the capital they invest. Strategic buyers consist mainly of companies in related businesses that wish to buy a company to give them greater market reach and drive more revenue and earnings to their business. Generally, they are willing to pay more for a firm because the synergies derived from the acquisition may be greater than that of a stand-alone investment which yields a higher level of earnings. PEGs are investment firms backed primarily by institutional capital that makes direct investments to acquire all of a company or a majority and/or minority stake in a company. They may or may not put their own management in-place and generally wish to exit an investment over a 5 to 10-year period after acquiring by selling it for a higher price.
Your company may be a target for one or more of these three types of buyers. VR Business Sales New Haven has a data base of over 500 PEGs and 2,500 individual and strategic buyers that we tap into for any engagement and we can assist you in defining which type of buyer may be best for your firm.