A Deal Origination investment banking is the main source of revenue for many investment www.digitaldataroom.org/what-is-operating-synergy/ firms. The success of a company depends on its ability to keep a steady flow of lucrative investment opportunities.
In the past, companies began their investment and acquisition processes by establishing relationships with corporations and individuals in their local markets. They did this by personal connections, Rolodexes, golf games luncheons, and even attending industry conferences to identify business owners that might be interested in selling. Today, a company’s successful M&A process starts much earlier and has a more global focus, due advances in technology, data analytics, and specially-designed digital tools.
The primary task of M&A executives and their teams is to determine companies that could be attractive to buyers and to present them to business owners. Investment bankers receive an opportunity to pitch their clients if the business owner accepts the offer and earns an amount of commission to close the deal.
Investment banks can handle their deal sourcing internally or outsource the job to intermediaries who are experts in a particular market or industry. The intermediaries can scan for opportunities, interact with business owners and advance the deal by handling paperwork and providing information on the market. While a valuable tool, it can be time-consuming for investment banks to continually look through and filter opportunities and rely on intermediaries that might not always have accurate, up-to-date business information.
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