In the fourth and final part of our series on company search, we look at the direct approach as the most active form of identifying a company that is ready to sell. The search for a company can be accelerated by means of a multi-stage procedure:

Definition of a search profile: This can be done, for example, according to sectors, turnover sizes, creditworthiness, region and, if applicable, the age of the shareholders or decision-makers.

Creation of a longlist: Based on the previously defined criteria, a longlist of potential target companies can be defined. The use of specialised, non-publicly accessible databases and networks is a good way to do this. It is important not to define the sector too broadly, as the larger the longlist, the more difficult it becomes to derive a corresponding shortlist of target companies.

Creation of a shortlist: This “homework” is to be done by the acquirer. On the basis of the longlist, the acquirer compares the targets. In doing so, he answers the question to what extent the companies presented in the longlist fit his respective goals (e.g. sector attractiveness, possibilities for horizontal or vertical integration). The result of this check is a list of favourites that is intended for a direct approach.

Contacting and addressing: Subsequently, the shortlist candidates are assessed for their interest in selling. This step requires a high degree of experience on the advisor side and can lead to very concrete talks for a company succession within a few weeks.

Klaus-Christian Knuffmann, a management consultant specialising in business succession in Krefeld, points out that this kind of dynamic search for a takeover requires patience and composure on the part of the prospective buyer: “Many a medium-sized entrepreneur needs months for his own process of inner clarity regarding a pending business succession. He cannot be led to a result by pressure? The time factor is therefore very important for both sides - the buyer and the seller - for good decisions and resilient objectives.