Buyer Representation may be particularly beneficial to a buyer with a narrow search criterion or with a specific company targeted for acquisition, and when the buyer wants to make anonymous inquiry. Buyer representation may be beneficial when the search targets a broad geographic area or a far away geographic area, when the representative works with affiliates in those areas.
Otherwise, we’ve found buyers less likely than sellers to seek formal third party representation. Buyers tend to be more open in their search than sellers, less concerned about keeping their search anonymous and often engaged in the search on a full time basis. Buyers are apt to search out brokers and others who might know of a business for sale that may be of interest or who may learn of something that might be of interest to the buyer, but informally, so as to be free to solicit help from where it can be found and free to look wherever the search may lead. Nevertheless, having an experienced third party in the mix can be very helpful to both sides of the process.
Knowledge and Experience: An experienced agent who knows the way and who can assist with valuation, preparation, presentation, negotiation, development of the offer, due diligence and with other aspects of the selling/buying process, through the closing, will often prove invaluable.
Buffer of Confidentiality: A third party can anonymously and safely facilitate the disclosure of a great deal of confidential information. Buyers will want information on which to gauge their level of interest. Cautious sellers will want to withhold information until certain that the buyer is in fact a legitimate buyer; one who is sufficiently interested in and capable of buying the business, and not just a curious party; just a looker or maybe a competitor.
Bridging the Gap: Very quickly and very often the naturally conflicted interests of buyer and seller will surface. An independent third party operating under a confidentiality agreement will probably be less threatening to the owner, than will a buyer with conflicted interest. A third party will be better positioned to obtain the necessary information from the seller and in best position to manage and exchange confidential information in a manner that is safe and secure to buyer and seller alike; buffering the exposure until legitimacy and fit can be confirmed.