TruSight’s mission is to create a more targeted M&A environment by directly connecting lower middle market investment banks and advisors with private equity firms that are looking for businesses to acquire.
We work with sell-side bankers and advisors by distributing their deals to our network of private equity firms, family offices and strategic acquirers. And coupled with our strategic approach to business intelligence, we are tracking the pulse of M&A in real-time.
One of the most advantageous outcomes of building this network and investing in technology is the robust feedback that we receive from the market. When we get a new teaser from one of our sell-side partners, we build a targeted list of investors, market the deal, and hear back quickly from our buy-side clients.
Providing clear market feedback to a sell-side client is a valued differentiator: the headwinds become more clear and easier to navigate. It’s a part of the deal process that we recommend that all investment bankers and advisors work on improving.
We put together this quick guide from lessons we’ve learned over the past decade to help bankers and advisors gather and distribute market feedback for their clients.
Cultivate relationships with private equity firms
The best way to know what an investor wants is to have a complete understanding of what they’re looking to acquire. But investment interest this year may change next year.
That’s why it's crucial to cultivate long-term relationships with private equity firms and keep those conversations fresh, staying up-to-date with their latest investment thesis. In addition, having a warm relationship with an investor means that you have a higher likelihood that a teaser will be reviewed and generate real feedback for your client about market interest.
TruSight coordinates regular calls and meetings with investors in our network, leveraging industry conferences for in-person conversations and quarterly virtual check-ins. That way, when an advisor partner reaches out with a new deal, we know exactly which investors might be interested in the opportunity.
Know your buyers
A broad auction process can help create a more competitive environment to maximize outcomes by ensuring that the deal gets in front of as many buyers as possible. But widening your options too far could mean that you’re also reaching buyers who may not be a good fit. This approach translates to more effort, and less feedback to help you improve your process.
Instead, we recommend identifying a curated list of relevant buyers who have expressed interest in the industry, through investment criteria or acquisition history.
We’ve tried every M&A database in the industry, and the one we’ve found most helpful is Private Equity Info, which is specifically designed to help investment bankers close more deals with private equity firms. By tracking thousands of lower middle market acquisitions, Private Equity Info allows you to filter firms by industry, deal size and portfolio composition. And after you’ve built your list, you can quickly identify the exact decision-maker for your deal.
Leverage technology
Relationships with investors are only as good as the information you glean from them.
Properly documenting your conversations with investors allows you to more quickly identify the appropriate buyers for your sell-side process by easily sorting the data that you’ve collected in a CRM.
TruSight has made a significant investment in technologies like Hubspot – custom-built specifically to our M&A-related needs – which allow us to document emails, meetings and feedback, and provides real-time reporting and analytics, contact management, email marketing and more.
Powerful tools like this give us the ability to keep track of the entire sell-side process and provide our investment banker and advisor partners with real-time feedback for their clients.
Develop weekly check-ins with your client
Establishing a weekly check-in call with your client is also a best practice for communicating the latest updates in your sell-side process.
This allows you to present the range of interest from investors: who’s signed an NDA for the CIM, requested additional materials, or passed on the opportunity. You can also relay anecdotal information, such as comparable valuations or leads on other firms that may be interested in the deal.
And if you’re working with a comprehensive data collection effort housed in a CRM, you can show your clients exactly where each conversation stands.
