How Leading M&A Teams Consistently Source Deals

The mergers and acquisitions (M&A) teams must consistently source deals to keep their pipelines full and manage deal flow. Deal sourcing is fundamental to M&A activity and represents the first stage of any transaction

- Dr. Satish Patil

It all involves identifying potential investment opportunities, positioning your firm to prospective buyers and sellers, generating leads, and managing relationships with potential intermediaries. Here are a few steps the M&A teams can use to identify potential targets and build relationships with buyers and sellers.

THE M&A DEAL SOURCING PROCESS

Private equity firms, investment banks, and venture capitalists rely on sourcing to find investment opportunities. During deal origination, the goal is to identify targets based on well-defined criteria like strategic fit, competition, and financial performance. The smaller firms need to be proactive in sourcing their proprietary deals. There are many approaches to deal sourcing. For example, some companies use dedicated in-house teams to handle deal origination, and some engage with investment banks or other advisors-but no matter what your approach is, having a vast network of contacts is very important.