How to Sell Your Business – Types of Buyers, Private Equity Groups (PEGS)

Selling your business is quite complex.  One of the most important things you should understand in order to get the highest business value who your buyer is and what they might want.  PEGS or Private Equity Groups are a viable group of buyers.

Private Equity Groups, also known as PEGS.  PEGS are investment groups.  They want to buy a business – grow it quickly and exit in 5 to 7 years.  For a business to be a fit for them there must be a plan for growth.  Generally, to get into a line of business they are not already in, these Buyers usually want businesses with at least three million dollars of EBITDA.   The first buy in an industry by a PEG is generally called a Platform.  If they are already owners of the same type of business they may buy a smaller competitor.  This is called an add-on transaction.  They will joint venture with Sellers who are willing to sell control.  This can be a good group of prospects if the management wants to buy the business but does not have sufficient capital and the business has very good growth prospects and is fairly large. 

Business brokers and business intermediaries can assist you in finding PEGS and other buyers.  Remember, identify your best buyer and market to them.

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
www.harvestbusiness.com
gcaruso@harvestbusiness.com
410-507-5441