Buy/Search Firms - Are they worth it? Any Advice?

searcher profile

June 29, 2024

by a searcher from Creighton University - Heider College of Business in Kansas City, KS, USA

Hello all,

I am currently searching for a small business in the wholesale/distribution realm preferably in building material or construction and I would also consider other B2B distribution businesses.

I am at the stage of understanding what I can afford on my own and also building a plan to research, identify, and contact small businesses that fit my search. I am doing this while also working my current full-time job. I have been told that utilizing buy/search firm to essentially do this outreach for you is another good option. It seems many of these also do due diligence. I am unsure of the fees associated with this work but with me being a first time buyer, it seems enticing. What has your experience been with these types of search firms or consultants?

Any feedback is appreciated!

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commentor profile
Reply by a searcher
from The University of Chicago in Dallas, TX, USA
I'm also interested in finding a comprehensive guide of service providers who help on the front-end of search and ETA. I'm looking for a list of key players, industry expertise, fee structures (retainer, success fee, pay-per-lead, etc.), and services offered (deal sourcing, due diligence, etc.). It would be incredibly helpful to have a directory or wiki of resources that is vetted and qualified (e.g., an Angie's list for search/ETA). If it doesn't exist, I might be willing to start a shared Google doc to collect this information. As an exampl,e Outflow Agency, a agency which focuses on deal sourcing recently reach out to me, but I haven't used them.

Please share links or names of other firms in this space!
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Reply by a searcher
from University of Edinburgh in Singapore
Brett, dropping by to offer some unsolicited industry advice:
These are typically very low margin businesses with very little differentiation. Their low capital intensity has made them pretty attractive to PEs which have sponsored some of the largest consolidators in the space... That might result in larger multiples for your targets.
You can look into Azelis, IMCD, DKSH, Caldic and Brenntag for more info on the space... Happy to answer any other questions you might have.
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