Buyer Identification Framework

BUYER IDENTIFICATION PHILOSOPHY

Building the Right Buyer Universe

BUYER IDENTIFICATION FUNDAMENTALS

WHY BUYER SELECTION MATTERS:
☐ Not all buyers are created equal
☐ Right buyer = higher price + better terms
☐ Wrong buyers waste time and energy
☐ Competition creates value
☐ Buyer fit affects deal certainty

BUYER TYPE OVERVIEW:

STRATEGIC BUYERS:
☐ Acquire for business synergies
☐ Typically pay higher multiples
☐ Integration expected
☐ Focus: revenue, cost, market synergies

FINANCIAL BUYERS (PE):
☐ Acquire for financial returns
☐ Multiple-based valuation
☐ Management typically stays
☐ Focus: growth, cash flow, exit potential

EACH TYPE'S PERSPECTIVE:

Strategic thinks: "What does this add to my business?"
PE thinks: "Can I generate 3x+ return in 3-5 years?"

BUYER IDENTIFICATION PRINCIPLES:
☐ Cast a wide net initially
☐ Qualify rigorously before outreach
☐ Understand each buyer's motivation
☐ Assess ability and willingness to close
☐ Create competitive tension
☐ Don't fall in love with one buyer

COMMON IDENTIFICATION MISTAKES:
☐ Too narrow a universe
☐ Only obvious buyers
☐ Ignoring financial buyers
☐ Not qualifying ability to pay
☐ Missing international buyers
☐ Overlooking PE add-on opportunities

---

COMPREHENSIVE BUYER ANALYSIS

Complete Buyer Universe Development

═══════════════════════════════════════
BUYER UNIVERSE FRAMEWORK
═══════════════════════════════════════

Company: _______________
Industry: _______________
Prepared by: _______________
Date: _______________

═══════════════════════════════════════
CATEGORY 1: DIRECT COMPETITORS
═══════════════════════════════════════

These are companies in your exact market:

| Company | HQ | Revenue | Why They'd Buy | Fit Score |
|---------|-----|---------|----------------|-----------|
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |

Direct competitor strategic rationale:
☐ Market share consolidation
☐ Customer base expansion
☐ Competitive elimination
☐ Geographic expansion
☐ Technology acquisition

═══════════════════════════════════════
CATEGORY 2: ADJACENT MARKET PLAYERS
═══════════════════════════════════════

Companies in related markets that could expand:

| Company | Their Market | Revenue | Entry Strategy | Fit Score |
|---------|-------------|---------|----------------|-----------|
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |

Adjacent player strategic rationale:
☐ Market expansion/diversification
☐ Product line extension
☐ Technology/capability acquisition
☐ Customer base leverage
☐ Channel access

═══════════════════════════════════════
CATEGORY 3: LARGE TECH/PLATFORM PLAYERS
═══════════════════════════════════════

Large companies that could add your product:

| Company | Focus | M&A Activity | Why They'd Buy | Fit Score |
|---------|-------|--------------|----------------|-----------|
| | | High/Med/Low | | /10 |
| | | High/Med/Low | | /10 |
| | | High/Med/Low | | /10 |
| | | High/Med/Low | | /10 |

Large platform rationale:
☐ Fill product gaps
☐ Acqui-hire talent
☐ Defensive acquisition
☐ Market entry
☐ Innovation sourcing

═══════════════════════════════════════
CATEGORY 4: PRIVATE EQUITY - PLATFORM
═══════════════════════════════════════

PE firms that would buy you as a platform:

| Firm | Fund Size | Sector Focus | Recent Deals | Fit Score |
|------|-----------|--------------|--------------|-----------|
| | $___B | | | /10 |
| | $___B | | | /10 |
| | $___B | | | /10 |
| | $___B | | | /10 |
| | $___B | | | /10 |

Platform PE criteria:
☐ Revenue typically >$10-20M
☐ EBITDA positive or path clear
☐ Defensible market position
☐ Buy-and-build potential
☐ Strong management team

═══════════════════════════════════════
CATEGORY 5: PE PORTFOLIO ADD-ONS
═══════════════════════════════════════

PE-backed companies that could acquire you:

| Portfolio Co | PE Sponsor | Their Revenue | Synergy | Fit Score |
|--------------|------------|---------------|---------|-----------|
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |

Add-on criteria:
☐ Complementary to platform
☐ Geographic or product expansion
☐ Customer base synergy
☐ Technology enhancement
☐ Typically smaller deals ($5-50M)

═══════════════════════════════════════
CATEGORY 6: GROWTH EQUITY
═══════════════════════════════════════

Growth investors for minority or majority:

| Firm | Stage | Check Size | Sector Focus | Fit Score |
|------|-------|------------|--------------|-----------|
| | Growth | $___M | | /10 |
| | Growth | $___M | | /10 |
| | Growth | $___M | | /10 |
| | Growth | $___M | | /10 |

Growth equity fit:
☐ High growth (40%+ YoY)
☐ Large market opportunity
☐ Scalable model
☐ Strong unit economics
☐ Need capital for expansion

═══════════════════════════════════════
CATEGORY 7: INTERNATIONAL BUYERS
═══════════════════════════════════════

Non-domestic acquirers:

| Company | Country | Revenue | US Entry Motivation | Fit Score |
|---------|---------|---------|---------------------|-----------|
| | | $___M | | /10 |
| | | $___M | | /10 |
| | | $___M | | /10 |

International buyer rationale:
☐ US market entry
☐ Technology acquisition
☐ Customer base access
☐ Talent acquisition
☐ Strategic beachhead

Comprehensive Buyer Prioritization Matrix

Buyer	Type	Strategic Fit	Financial Ability	Likelihood	Speed	Total	Priority
		/10	/10	/10	/10	/40	A/B/C
		/10	/10	/10	/10	/40	A/B/C
		/10	/10	/10	/10	/40	A/B/C
		/10	/10	/10	/10	/40	A/B/C
		/10	/10	/10	/10	/40	A/B/C
		/10	/10	/10	/10	/40	A/B/C
		/10	/10	/10	/10	/40	A/B/C
		/10	/10	/10	/10	/40	A/B/C

Comprehensive Buyer Outreach Strategy

═══════════════════════════════════════
BUYER OUTREACH PLAYBOOK
═══════════════════════════════════════

OUTREACH APPROACH DECISION:

Option A: BROAD AUCTION
☐ Contact 40-60+ buyers
☐ Maximize competition
☐ Banker typically leads
☐ Best for: commodity assets, known value

Option B: TARGETED PROCESS
☐ Contact 15-25 selected buyers
☐ Quality over quantity
☐ More CEO involvement
☐ Best for: strategic assets, relationships

Option C: NEGOTIATED SALE
☐ Contact 3-5 most likely buyers
☐ Minimize disruption
☐ Relationship-driven
☐ Best for: clear buyer, speed priority

SELECTED APPROACH: _______________

═══════════════════════════════════════
TIERED OUTREACH PLAN
═══════════════════════════════════════

TIER 1 - PRIORITY TARGETS (Week 1-2)
Contact: 8-12 buyers
Goal: Generate 5-8 serious conversations

| Buyer | Contact Method | Initial Contact | Why Priority |
|-------|----------------|-----------------|--------------|
| | ☐ Banker ☐ CEO ☐ Board | | |
| | ☐ Banker ☐ CEO ☐ Board | | |
| | ☐ Banker ☐ CEO ☐ Board | | |
| | ☐ Banker ☐ CEO ☐ Board | | |
| | ☐ Banker ☐ CEO ☐ Board | | |

TIER 2 - SECONDARY TARGETS (Week 3-4)
Contact: 12-15 buyers
Goal: Generate 3-5 additional conversations

| Buyer | Contact Method | Initial Contact | Why Include |
|-------|----------------|-----------------|-------------|
| | ☐ Banker ☐ CEO ☐ Board | | |
| | ☐ Banker ☐ CEO ☐ Board | | |
| | ☐ Banker ☐ CEO ☐ Board | | |
| | ☐ Banker ☐ CEO ☐ Board | | |

TIER 3 - CONTINGENCY (If Needed, Week 5+)
Contact: 10-15 additional buyers
Trigger: <3 serious bidders from Tier 1-2

═══════════════════════════════════════
CONTACT STRATEGY BY TYPE
═══════════════════════════════════════

STRATEGIC BUYERS:
Best contact: Corp Dev + CEO relationship
Approach:
☐ Teaser first (blind or identified)
☐ NDA before full CIM
☐ Management meeting to assess fit
Watch out for: Tire-kickers, fishing for info

PE PLATFORM:
Best contact: Banker relationship, direct partners
Approach:
☐ Teaser with key metrics
☐ Quick call to assess interest
☐ CIM + model for serious parties
Watch out for: Fund fit, dry powder availability

PE ADD-ON:
Best contact: Via PE sponsor or direct to portfolio
Approach:
☐ Through PE sponsor is preferred
☐ Assess platform strategy fit
☐ Understand integration appetite
Watch out for: Decision authority, timeline

═══════════════════════════════════════
OUTREACH TRACKING
═══════════════════════════════════════

| Buyer | Tier | Outreach Date | Response | NDA | CIM | Meeting | Status |
|-------|------|---------------|----------|-----|-----|---------|--------|
| | | | | ☐ | ☐ | ☐ | |
| | | | | ☐ | ☐ | ☐ | |
| | | | | ☐ | ☐ | ☐ | |
| | | | | ☐ | ☐ | ☐ | |
| | | | | ☐ | ☐ | ☐ | |

FUNNEL METRICS:
Contacted: ___
Expressed interest: ___ (___%)
Signed NDA: ___ (___%)
Received CIM: ___ (___%)
Management meeting: ___ (___%)
Submitted IOI/LOI: ___ (___%)

Buyer Qualification Checklist

BUYER QUALIFICATION CRITERIA

For each serious buyer, validate:

STRATEGIC FIT:
☐ Clear rationale for acquisition
☐ Synergy potential identifiable
☐ Integration complexity acceptable
☐ Cultural alignment possible
Score: ___/10

FINANCIAL CAPABILITY:
☐ Can afford the price
☐ Financing available/accessible
☐ Track record of closing deals
☐ No recent deal failures
Score: ___/10

EXECUTION ABILITY:
☐ M&A experience
☐ Sufficient corp dev resources
☐ Board/approval process reasonable
☐ Timeline expectations realistic
Score: ___/10

DEAL CERTAINTY:
☐ Low regulatory risk
☐ Minimal third-party dependencies
☐ Stable leadership
☐ No competing priorities
Score: ___/10

OVERALL FIT SCORE: ___/40

Qualification threshold: 30+ to proceed actively

---