As a corporate development professional, finding high-quality deal flow is critical to the success of your organization. However, sourcing middle-market M&A deals can be challenging, especially when you’re competing against other buyers.

In this article, we’ll explore some of the best ways to source middle-market deal flow in corporate development, including leveraging your network, creating an effective succession plan, working with intermediaries, and conducting proactive outreach.

Leverage Your Network

One of the most effective ways to source middle-market M&A deal flow is by leveraging your network. This means building and maintaining relationships with people who can provide you with leads on potential deals. This could include business brokers, investment bankers, private equity firms, commercial lenders, attorneys, accountants, and other professionals in the industry.

To build a strong network, attend industry conferences, join relevant professional associations, and participate in online forums and groups. Don’t forget to stay in touch with your existing contacts by sending them updates on your company’s activities, sharing industry news, and inviting them to events.

Succession Planning

One of the most effective ways to source middle market deal flow is through effective succession planning. Succession planning involves identifying potential acquisition targets by analyzing their ownership structure, management team, and potential for growth. Companies that are family-owned or have aging leadership teams are great targets for acquisition.

Work with Intermediaries

Intermediaries such as investment banks, business brokers, and M&A advisors can be valuable partners in sourcing middle-market deals. These professionals have access to a wide network of potential sellers and can help you identify and evaluate acquisition opportunities.

When working with intermediaries, it’s important to establish clear expectations and communication channels. Make sure you provide them with a clear understanding of your acquisition criteria and preferred target markets. Be prepared to ask the right questions and conduct thorough due diligence to ensure the deal is a good fit for your organization.

Conduct Proactive Outreach

Another way to source middle-market deal flow is by conducting proactive outreach. This involves identifying potential targets and reaching out to them directly. This can be done through various channels, including cold calling, email, or social media.

To be successful in this approach, it’s important to have a well-defined target market and acquisition criteria. You should also have a compelling value proposition and be able to clearly articulate why your organization is the best fit for the potential seller. Finally, be persistent and follow up regularly to maintain momentum and build a relationship with the seller.

Sourcing middle-market deal flow is critical to the success of any corporate development strategy. While it can be challenging, leveraging your network, working with intermediaries, and conducting proactive outreach can help you identify and evaluate potential acquisition opportunities.

By developing a robust deal sourcing strategy, you’ll be well-positioned to identify and execute on the right deals that will drive growth and success for your organization.