Mergers & Acquisitions For Dummies
Book image
Explore Book Buy On Amazon

Most often, Buyers of middle and lower middle market companies in an M&A transaction are institutions (PE firms or strategic Buyers). Individuals can certainly buy these companies, but due to the size of the companies and the amount of money needed to buy them, individuals buying companies in these markets are somewhat rare.

Individuals seeking to acquire a company may be little more than dreamers with no money. Sellers should take appropriate steps to ensure individual Buyers can back a transaction.

Institutions usually have more money than individuals, greater access to other sources of capital, and a certain level of sophistication as compared to most individuals. The executives at a company or PE firm probably have more experience doing deals, more experience running a business, and greater financial acumen than an individual. Not always, of course, but usually.

Note, however, that a wealthy individual may be able to act more quickly than a company. An individual Buyer has far less bureaucratic red tape than an institutional investor Buyer.

An important distinction is an executive backed by a private equity firm, a situation that’s really closer to a PE Buyer than an individual Buyer. In this case, the individual essentially has the financing lined up and is simply seeking the right acquisition.

About This Article

This article is from the book:

About the book author:

Bill Snow is an authority on mergers and acquisitions. He has held leadership roles in public companies, venture-backed dotcoms, and angel funded start-ups. His perspective on corporate development gives him insight into the needs of business owners aiming to create value by selling or acquiring companies.

This article can be found in the category: