Acquisition Representation Services
IBA is predominantly a seller representation company. We traditionally do not represent buyers interested in acquiring a company represented for sale by another mergers & acquisitions (business brokerage) firm. The reason we elect to minimize the number of our buyer representation projects is that it has been our experience that many firms serving the mergers & acquisitions (business brokerage) marketplace do not have the knowledge, experience, and professional transaction facilitation skills found at IBA. This can result in one of the following four scenarios for a business buyer and/or an IBA professional representing a buyer:
1. The business is improperly valued resulting in the creation of false expectations for the business owner regarding market value and transaction terms. False expectations of this nature are very difficult to change. It is not IBA’s job, or that of our client, to educate the business owner or seller’s broker on how to properly value a company. It commonly takes multiple failed negotiations for selling parties of this type to become realistic regarding the marketplace for the business. Almost annually, IBA completes transactions for business owners who were previously listed for sale with another firm, but migrated to IBA for representation after failing to sell in a reasonable time period.
2. The purchase of a business is an investment decision requiring the ability to review the information necessary to properly assess the business opportunity. Unfortunately, it is common for some firms serving the business brokerage marketplace to withhold or not to assemble the information necessary for a buyer to correctly evaluate a business. The inability to review appropriate information during the evaluation process that precedes making an offer can result in buyer frustration, buyer withdrawal from negotiations, and/or a purchase offer being generated and potentially accepted that will not be justified during due diligence. This lack of knowledge of the proper sale process often results in failed negotiations. IBA has a track record for successfully completing transactions it participants in and creating an environment of “full disclosure” for “good faith” negotiations.
3. The representing broker does not return phone calls, respond to emails, or make the representation project a priority in their schedule. Providing superior customer service is a priority at IBA. We make a sincere effort to respond to all phone calls & emails in a timely manner. Unfortunately, this is not the standard in our industry. It is very frustrating for a buyer or IBA professional to have to wait an extended period for a response when an effort is being made to evaluate a business for acquisition or negotiate in “good faith”.
4. The representing broker does not have the experience & knowledge necessary to successfully facilitate a transaction. This often results in an IBA professional having to do the selling broker’s job in terms of education on the sale process and deal facilitation. The sale of a business is a sophisticated process that requires years of experience to properly learn & perform. IBA is happy to help facilitate this process on behalf of its clients, but it is frustrating for our professionals when the work load is unfairly allocated between the two brokers because one of the brokers lacks experience & knowledge. It is recommended that business owners properly vet the experience & knowledge of their broker prior to signing a representation agreement.
The preceding four reasons are why IBA infrequently represents buyers in transactions involving companies represented for sale by other mergers & acquisitions firms. However, we also recognize that past clients & buyers in general have a need for professional representation services related to the acquisition of a privately held company or family owned business. IBA professionals are available as a informational resource for these parties and when appropriate will agree to serve as buyer’s brokers. The most common projects at IBA involving buyer representation involve partner or family member buyouts, strategic acquisitions of specific companies, or targeted acquisitions in a specific industry or geographic area.