Buy-side M&A for Private Equity Firms

Our buy-side representation process includes these key areas:

• Acquisition Strategy

A rigorous process for screening, identifying, and evaluating potential acquisition candidates is essential for effective buy-side engagement. We can assist in clarifying and refining your transaction goals and the criteria for assessing potential targets. This includes factors such as industry niche, operations, sales volume, profitability, geography, and management.

• Candidate Search & Contact

Once the acquisition profile is set, a focused buy-side search can commence. EdgeWork Capital concentrates on exclusive off-market deals. Our approach encompasses various potential targets that may not be actively for sale but could consider selling if approached appropriately. You may also incorporate potential targets that your firm has previously recognized.

• Candidate Screening & Selection

Your management team is dedicated to overseeing your portcos. You are engaging EdgeWork Capital to handle much of the buy-side process. A key aspect of our role is to collect relevant information about potential target companies, enabling us to assess these opportunities in line with your acquisition criteria.

After the initial screening, we will present the appropriate candidates to your team for further assessment and discussion. The next step involves gathering more detailed information from the selected candidates to narrow down the options. We will continue to act as the intermediary until you are ready to schedule a site visit and request more comprehensive information.

• Site Visit & Diligence

Face-to-face meetings between the management teams of our clients and potential targets play a crucial role in the buy-side process. While EdgeWork Capital can collect and analyze written information and financial documents, such direct meetings are indispensable. In some cases, a prospective target may wait to meet until an offer is made. However, for mergers and acquisitions in the lower middle market, we have effectively facilitated initial meetings between the involved parties at this stage of the buy-side process.

• Letter of Intent

EdgeWork Capital will collaborate with your legal team to create a tailored Indication of Interest (IOI) and a Letter of Intent (LOI) for submission to the target entity. The LOI will feature both binding and non-binding provisions, summarizing the key aspects of your proposed transaction. After discussions between our client and the target, the LOI will be formally signed by both parties. This process ensures that both sides are aligned in the general structure of the deal before our client invests significant time and resources into detailed due diligence.

• Due Diligence

The due diligence process involves a thorough review of the target’s documents, which includes legal, financial, and strategic assessments. This includes examining financial statements, tax returns, contracts, and patents. The legal review is conducted by our client’s transaction counsel, while internal and external accountants assess the financial data, and management carries out the strategic evaluation. The findings from the due diligence process will help determine the value of the target’s business and may influence various aspects of the deal, such as financing, representations and warranties, and employment agreements outlined in the binding purchase agreement. We collaborate closely with our client’s deal team throughout this process.

• Closing

Before finalizing the transaction, we draw on our knowledge of the target company’s business, ownership, management, and financial conditions. This information assists our client’s management team in deciding the best transaction structure, negotiating the terms, and successfully completing the acquisition.