Stoneridge Buy-Side Associate Partner Helps to Find Your “Diamond in the Rough”
You provide buy-side representation — what does that mean?
I help buyers grow their businesses or get into a market by finding strategic transaction opportunities for them based on their long- and short-term goals.
Owners who are looking to expand or acquire a company can go out and look for the right business and make an offer – but that can be a time-consuming process, and the buyer has limited control over other competing buyers and whether the current opportunities available on the market truly meet their needs. Or they can engage someone like me to go out and find the right opportunities – even if they aren’t on the market yet – and bring them directly to the buyer. There’s typically less competition, and you have someone looking for that diamond in the rough for you. I am targeting and searching for exactly what the buyer wants.
You will even go after opportunities that are a good fit for the buyer’s needs if they aren’t currently listed for sale?
Absolutely. So, the buyer is often getting first access to the opportunity before anyone else.
What kind of buyer can benefit from buy-side representation?
Any buyer who has an idea of what they’re looking for and how they want to complete an acquisition can get real value from buy-side representation. And once I understand a buyer’s needs, even if they don’t make a purchase right now, I’ll make a mental note and keep an eye out for future opportunities for them. I like to really understand the organization’s vision and what their long-term goals are so we can start looking at tomorrow today.
What do people need to know about the buy-side process?
It’s always good to come into the process as prepared as possible. So, for example, have your funding lined up so you can move quickly if the right opportunity presents itself. Have a general idea of what you’re looking for – what geographic markets do you want to be in, what size business are you interested in purchasing based on EBITDA or revenue, what types of services are you interested in providing? I need an understanding of the buyer’s needs so I can find the right businesses to bring to them – or so I can challenge the buyer in the best way possible by making suggestions or bringing them something slightly different than what they asked for and explaining why I think they should consider that direction. Maybe a business is doing $200,000 less in EBITDA than you’re looking for, but its profitability is stronger so it makes more sense for your goals.
If a buyer is interested in working with you to identify strategic opportunities for them, how does it work?
We’d start with an exploration call where I would get a general sense of what the buyer is looking for, how they plan to fund any potential transaction and what their timeline is. Once they’ve signed a representation agreement, I’ll do another follow-up call to get running on the search process, then I’ll check in regularly to give the buyer updates on how things are progressing.
We’re only compensated if we identify and close a successful transaction. And the buyer can continue to look for the right opportunity on their own, even after we’re representing them.
Why should someone engage Stoneridge as their buy-side advisor if they’re thinking about growing or expanding their business?
We’re a “white glove” service; we do everything from soup to nuts. We work through the process from start to finish. And some of these sellers have never sold a business before, so they need a certain level of support and understanding, as well. We build relationships with both the buyer and the seller to help keep the transaction on track.