The Advisor’s Role, Part 1
The role of a Business Advisor during a search for either an acquisition candidate or a partner to sell to is sometimes unclear, so let’s try to shed some light on the subject. There’s no magic to the advisor’s role, but it does take industry knowledge, M&A transaction expertise, and the willingness to do a fair amount of groundwork.
If asked to search for a candidate, the advisor will research candidates that fit the client’s candidate profile. It sometimes begins with a search of NAICS codes or combing lists from a variety of sources, ranging from industry periodicals and association membership lists to offerings from major business list brokers.
Once candidates have been identified, the advisor prepares an introductory letter and sends it to the best prospects. To maintain client confidentiality, letters are written on the letterhead of the advisor, who signs them and serves as the contact person for any inquiries.
Letters are followed by phone calls to the candidates to evaluate their interests and help further qualify them. In my experience, an advisor with industry expertise who represents a well-known organization will have greater success in getting to the decision-makers.
Once the candidates have been identified and the list narrowed down, the Advisor will begin to arrange for client and candidates to speak together, serving as meeting facilitator. (Meetings are initiated only after Non-Disclosure Agreements have been signed by all interested parties.) If both parties want to move forward, the advisor will arrange and take part in a site visit, where he will continue to serve as point person for the process. (Next time: What happens if the site visit is successful.)