Derek Wickens, Head of Research at BCMS Corporate, explains our unique approach to research and why it is both necessary and effective.
Q: I downloaded your book from your website which states that you locate, on average, 230 potential acquirers for each of your clients. I’ve been told by other business sales companies that this isn’t necessary. Why do you think this helps maximise sale price?
A: It is important to note that volume is not a goal in itself, the average of 230 potential buyers is simply a consequence of the comprehensive nature of the research we undertake and the man-hours we invest, on behalf of our clients, in additional screening and qualification. Is this necessary? Yes, absolutely.
As a starting point, we believe there is simply no other reliable way of selling a business for its maximum value. I have explained more about our unique capabilities below which I hope further emphasises the necessity of what we do and how this benefits our clients.
In pure financial terms our investment in third party data is, after the Company’s salaries, our biggest investment. We review data products constantly to ensure that our researchers and analysts have access to the best data available. Unique to BCMS Corporate though, and something which no amount of money could buy, is our own database containing details of acquirers, their needs and wants.
This database grows on a daily basis, it is the product of all contact that all staff, right across the business, have with companies seeking acquisitions. This often gives us privileged information, not in the public domain, about a company’s strategic intent.
It can include for example, information on diversification plans. This commonly results in the final research document containing companies which appear, based on public domain information, to be unrelated to our clients businesses. It is surprising how often an ‘unlikely’ company becomes the successful buyer.
The human factor
Data is important but the human factor is absolutely critical to success. Databases are only as good as the way the information is categorised, assembled and can be searched. Companies are invariably listed under broad ranging generic headings which makes ‘drilling down’ to locate only those that are relevant very difficult.
To overcome this problem, BCMS Corporate has assembled what we believe is the most experienced Research Department in our sector – collectively our Research Department has more than 80 years experience to underpin their judgment.
An initial search using criteria agreed with our clients, can produce thousands of results, the painstaking process of qualification then begins. We view company websites, check company structures, identify the most appropriate decision-maker, review announcements to market (if PLC’s), product ranges, customers etc.
This enables us to make informed judgments about which companies have the best synergies, allied to other factors like strong financials. Synergies, in other words, overlapping features and benefits are vitally important, they are the things which we know from experience, strategic buyers view as most valuable.
- An energy consulting company we represented was bought by a forestry and engineering firm. We only discovered the ambition to diversify into energy consulting via an inconspicuous link from the buyers’ website.
- A traffic management product company was bought by a lift control company, entered in our own database after a conversation with one of our staff, about their wish to diversify. This buyer has now gone on to buy another company whose owners were represented by us. In each case the buyer was part of a competitive bidding process involving other strategic buyers we had identified through the customary research process.
- A supplier of sports equipment to schools was bought by a manufacturer of street furniture. Again, the buyer was only identified through the meticulous, manual qualification process.
Without this approach we passionately believe that your most suitable acquirer may never appear in the final list. All our prospective clients are very welcome to tour our head Office to view for themselves the scale of the resources which are applied to the task of selling their company.