In the last post I covered business-for-sale websites, which are fairly simple listings of businesses for sale, typically smaller businesses. For larger deals there are a few websites that go beyond a listing service, and they provide more powerful tools for sorting and searching to find the right buyer and the right seller.
The two M&A sites I’m familiar with are PEGBASE (www.pegbase.com) and AxialMarket (www.axialmarket.com). In both cases the business model is completely opposite of bizbuysell.com and the other business listing sites. For both of these sites the buyer pays to use the site, not the seller. Both consist mainly of private equity buyers, however Axialmarket also contains strategic buyers.
AxialMarket describes itself with the statements, “AxialMarket provides technology-enabled tools and analytics to help intelligently connect qualified buyers and sellers of privately held companies. Since 2007, AxialMarket’s deal management and deal origination platforms have been used by many of the most active lower middle market financial buyers, strategic buyers, and M&A Advisory firms to source, manage, and execute private M&A transactions across a broad range of industries, geographies, and transaction types. “ PEGBASE describes itself with the statement, “PEGBASE is a consistently formatted M&A Investment Opportunities clearing house that reaches key M&A players in the most efficient and useable manner”.
We have a very complete list of PEGs, but AxialMarket tends to be more up to date with what kind of portfolio companies the PEG’s own, and exactly what they are looking for. That is one of the benefits of charging a fee, the PEGs and strategics are not going to want to waste that money and will spend some time creating an accurate profile on the AxialMarket website. The downside is that because it is fee based, they don’t have a complete list of PEGs and definitely not a complete list of strategics. For example, for the lower middle market we typically find strategic buyers that are not specifically looking for an acquisition, but will take a look at opportunities presented to them.
I’ve been impressed with the Axialmarket interface. It shows you what types of buyers fit your opportunity, and you can easily filter different buyer types (such as PEG platform, add-on, etc.). You can “mouse over” a buyer and instantly see a profile.
Like the business-for-sale websites, sites such as AxialMarket and PEGBase are a great tool to use to help find buyers, but it shouldn’t be the only tool. We’ve found the best results come from using every tool – both technology based as well as traditional mail and telephone.