Among many buyers, brokered deals are sometimes looked down upon relative to the prospect of a proprietary, off-market transaction. After all, the job of an intermediary is to get the highest possible price for their client, and they often do this by making the process as competitive as possible. While this is true, brokered deals don't come without their redeeming qualities, including:

(1) They're fast: You can email a broker today, and get involved in a deal process tomorrow
(2) They can serve as a useful source of “practice”, helping buyers refine their pitches and get in early "reps" evaluating companies and industries
(3) Given that the owner has hired a broker, buyers can be reasonably sure that they do indeed have a “real” seller on their hands
(4) The state of the information required by any buyer is often in considerably better shape relative to most proprietary opportunities
(5) Good brokers usually work with their sellers to properly calibrate their expectations on both valuation and structure, and can coach them on deal terms that are on- or off-market
(6) Not all brokers are equally adept at creating the competitive dynamics that typically push up prices. Brokered = expensive isn't always true
(7) Brokered deal-flow can act as a great source of new industry ideation, which buyers can then pursue within their proprietary outreach efforts

Joining me today to discuss everything above and more is Ryan Farkas, a Partner, Managing Director and Practice Leader in M&A and Capital Markets at BDO, who has successfully closed countless sell-side advisory transactions spanning dozens of industries in the lower middle market.

Link below, please enjoy!



Why You May Be Ignoring Brokered Deals at Your Peril