What are Buyers Looking for in the Lower Middle Market?


For owners looking to sell their businesses, it can be hard to know what buyers find attractive. This is particularly true in the lower middle market. While small business indexes point to more confidence in main street and a growing ecommerce market, the question remains: what is expected and aspired for in the lower middle market from investors and buyers?


In this lower range of business value, there are a lot of financial buyers, private money, and search fund advisors. The latter are often young entrepreneurs with limited experience but adequate financial backing from investors. There are few strategic buyers for companies in this value range. To owners who want to sell their companies to third parties, experts like the ones at SA Capital Partners will review with them the attributes of transaction-ready companies that buyers expect. These attributes include a strong management team (apart from the owner) that is properly functional and is prevented, via employment agreements, from competing against the company should they terminate employment. Strength also means a certain level of stability and predictability of revenue and cash flow. Considering low customer concentration and other value drivers such as state-of-the-art operating systems can mean the difference between a good value and a great value. Buyers are laser-focused on the quality of the management team and level of customer concentration.


The biggest obstacle in the way of a lower middle market owner selling her or his business is themselves in many cases. Too often they negotiate directly with potential buyers who are much more sophisticated and knowledgeable about the sale process, and who use experienced deal attorneys and investment bankers. To overcome this obstacle, it is critical that these owners’ level the playing field by retaining experienced financial experts before they talk to any buyer. Attracting a buyer can be hard too, which is why the most effective, least time-consuming way of doing so is to work with an experienced investment banking firm to conduct a controlled auction sale process. By bringing multiple competing buyers to the table simultaneously, the controlled or competitive auction maximizes a seller’s chances of receiving top dollar and closing the deal. An experienced investment banker will know how to attract the best strategic buyers without disclosing the identity of the seller.


SA Capital Partners is that team of experts that help make a sale successful. Considering the market’s growth and opportunity, don’t waste time searching for a perfect buyer, or even a potential one. With SA Capital Partners’ network pool of investors and buyers, the sale is as easy as matching your business with one of the buyers waiting in the wings. There are plenty of buyers available, but the best are the ones that understand you best, which is why a partnership with SA Capital Partners can make the process smooth and seamless.


About SA Capital Partners:

SA Capital Partners is an innovative financial services firm that specializes in mergers & acquisitions advisory and capital raising for lower middle market businesses. We aspire to give all the tools necessary to complete any transaction. SA Capital Partner’s financial services industry specialists provide comprehensive, integrated solutions to banking transactions. Our breadth of services and industry knowledge allow us to understand each client’s unique business needs. Our goal is to make all financial services available to every small business. Website: www.sacapitalpartnersllc.com Phone: (212)-235-2761 Email: info@sacapitalpartnersllc.com #sacapitalpartners #sacapital #sacapitalpartnersllc

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