In Deal Note® 160, we emphasized that sellers should avoid ‘tunnel vision’ for a single buyer and instead be prepared for many different types of buyers and dynamics. Similarly, in Deal Note® 138, we outlined the differences between strategic and financial buyers — highlighting that recognizing these distinctions leads to stronger outcomes.

In middle-market aerospace and defense M&A, the outcome of a sale is often determined less by how many buyers are contacted and more by whether the right buyers are engaged. Today, we’re focusing on targeted outreach.

Middle-market sellers who believe broad outreach creates more competition often find that poor alignment between their business and a buyer’s capabilities can lead to failed processes, valuation gaps, or prolonged diligence. A carefully curated buyer’s list, formulated alongside an experienced sell-side M&A advisor, ensures that outreach is focused on those with both the interest and the ability to close.

Examples of practices for Targeted Outreach:

  1. Understand the Buyer’s Motivations: Specific buyers might be looking to acquire specific technology, secure a long-term contract, or consolidate a fragmented supply chain. Additionally, a buyer might be focused on consolidating smaller players, improving operational efficiency, and eventually selling to a larger strategic buyer. The buyer’s acquisition rationale and understanding of it is pivotal to finding motivated buyers that are more likely to pay the best prices.
  2. Analyze M&A History and Trends: Research recent M&A activity to understand a potential buyer’s acquisition strategy. A recent uptick of acquisitions signals an active deal appetite and shows what types of businesses, technologies, or capabilities the buyer is focused on. This allows sellers to tailor their outreach more effectively.

Potential sellers, paired with seasoned middle market M&A advisors, can target the right buyers thoughtfully by incorporating some of the practices stated above. They will then experience a more competitive sale process, resulting in a higher certainty of closing and achieving a greater sale price.

Have a great day,

Brandon Bank
Associate