Hunting Deals in M&A
Finding the right deal is hard. But finding companies who don't want to be found is even harder. Dustin Intihar, Director, M&A, and Strategic Alliances at Lubrizol, joined me for an interview on the M&A Science Podcast and shared his tips and experiences in hunting deals in M&A. Here are some of the highlights:
"At the end of the day, a deal is not going to get over the finish line if it's not win-win" - Dustin Intihar.
Seek the Right Person
According to Dustin, most companies that don't want to be found are the 3rd, 4th, or 5th generation family-owned businesses. So the first thing you need to do is find out who is the appropriate person you should start talking to. Whether that's the owner or not, it will be someone who has the authority to influence a potential deal.
What Dustin likes to do is to start outside his network, as he figures out who is the person that can introduce him to the target company. Then he starts expanding outwards and looks into his professional network, past colleagues, or even Linkedin connections.
If that doesn't work, he will start using secondary online research tools such as social media, Capital IQ, Pitchbook, and start digging into the owners and the shareholders. You also might need to engage with consultants, find former employees, or even investment bankers.
First Point of Contact
During your first call, avoid saying that you want to buy their company. Because the reality is, you don't know enough about the company for that to be true. Treat it as dating. It's a get-to-know-each-other phase, so practice active listening while letting them know what your organization does. This phase is crucial because this will determine if they will want to meet with you in person or not.
At Lubrizol, they look for leadership teams who will stay post-acquisition. This is why he never pushes hard if the target doesn't want to sell the company. He might offer minority deals or partnerships instead of cutting ties with the company. Keeping relationships good and open is important as they might decide to sell in the future. However, if the target is open and willing to sell, then he insists on that first meeting.