Mandate\/Target Matching

Why Mandate/Target Matching?

After building out one's coverage, the investment banker can then begin matching the investment mandates of strategic and financial buyers to potential target within their coverage.

Mandate/Target Matching Process

Identifying Strategic & Financial Buyers

Obtaining Investment Mandates

Structuring Buy Side Engagements

Identifying Targets

Identifying Strategic & Financial Buyers

Now that we have defined our coverage, we can go about identifying strategic & financial buyers consistent with that coverage.

We can use various database services and platforms to screen for these buyers which will end up being corporate M&A departments (strategics) or financial buyers (private equity).

Obtaining Investment Mandates

Strategic and financial buyers will have criterion within which they invest. For example, they have certain industries and sub-verticals that they focus on.

Criterion will specify:

● Geography

● Revenue

● EBITDA

● Vertical & sub-vertical

Structuring Buy Side Engagements

After obtaining the investment mandates and discussing with strategic and financial buyers, most of them will have some sort of boilerplate agreement to source deals for them in a buy side capacity.

Identifying Targets

Now that we have investment mandates from strategic & financial buyers, we can go about screening for targets from databases such as Salesgenie.

After pulling the list of potential targets we then need to go in and analyze further each of the potential targets.

Applying the Mandate/Target Matching Methodology

The Mandate/Target Matching Methodology is the following:

1. Build relationships with strategic and financial buyers in a given industry sector or subsector (Use Mergr.com as a database within which to understand investment mandates and contact information)

2. Indicate your interest in sourcing deals on their behalf and obtain their investment mandate. This will usually be detailed in a one-page teaser or presentation that they will send to you

3. Screen for companies that match the mandate(s) in Salesgenie.com and obtain CEO/owner emails and phone numbers

4. Begin emailing and calling CEO/owners and soliciting interest in exploring strategic alternatives

5. Structure as a sell-side engagement or a buy-side engagement depending on CEO/owner’s level of interest in buying/selling

6. Collect historical financial data for the last three years

7. Introduce the financial and/or strategic buyer to the opportunity with the summary financial information and have them sign an NDA

8. Have a call with the financial and/or strategic buyer and then make the formal introduction to the CEO/owner and have a buyer/seller meeting