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Why Competitive Insights Fuel Better Buy-Side M&A


Less is often more — except when we’re talking about information for mergers and acquisitions (M&A). While it’s obvious for a buy-side M&A firm to look at the sell-side company’s financial projections and sales numbers, it’s equally valuable to conduct an in-depth analysis of the company’s competition. Competitive insights uncovered during the M&A process can be invaluable in helping determine whether a deal is worth pursuing.

Seeing the Bigger Picture

First and foremost, competitive information can help project the future potential of a possible purchase by allowing the acquirer to gain a better understanding of the niche in which the business operates. This can help buy-side M&A companies to understand how acquiring or merging with another company might benefit both companies long term.

Competitive insights can also serve to alert buy-side M&A companies to potential threats and opportunities should they opt to move forward with a merger or acquisition.

Also, good competitive insights can help buy-side M&A firms determine a good strategy for integration once the deal is concluded. The information gained can be used to help price new products, place advertisements, set long-term product development goals and shape marketing positioning.

Evaluating Other Options

Competitive insights can also sometimes prove helpful in a very different way. According to Zane Markowitz, Senior Managing Director at the McLean Group, not only can the information learned help a company evaluate a possible purchase or merger, competitive insights can sometimes reveal other options—alternative companies that may not officially be on the market that might be worth pursuing instead.

Buy-side M&A isn’t merely about evaluating companies for sale and making the best purchases; it’s also often about evaluating internal needs and proactively identifying companies to actively pursue. Sometimes the best possible purchase isn’t actually “for sale,” but can be acquired by a buyer who opts to take the initiative. And often if one company in an industry is for sale, it is a sign that the niche has matured enough that others may consider offers, as well.