Who'll Do Your Deal?

The answer often depends on your company's size.

 

If the company you want to buy or sell is a barber shop or a rural gas station, you are not a candidate for the mergers-and-acquisitions department of a Wall Street investment-banking firm or a large brokerage company. Only if your company's sales exceed $10 million are you likely to interest Wall Street behemoths such as Goldman Sachs & Co. or Drexel Burnham Lambert Inc.

For midrange companies with sales between $1 million and $20 million, you qualify for most of the large business brokers around the country. Chicago's W.T. Grimm & Co., also known as a leading scorekeeper for merger-and-acquisition deals, sets its minimum at $2 million. At Geneva Corp., in Costa Mesa, Calif., it's $500,000. Some brokers, such as First Main Capital Corp., in Plano, Tex., split their operations to handle differnt-size transactions. If your company has sales between $1 million and $50 million, First Main Capital's M&A intermediaries will gladly consider your deal. If your company's sales are below $1 million, First Main Capital will refer you to brokers in its Associates Business Xchange division.

The great majority of businesses sold through brokers are those that go for less than $300,000. VR Business Brokers, the nation's largest franchised business broker with 300 outlets, claims up to 7,500 sales a year, 80% involving companies with sales below $300,000. The nation's 10 franchised brokerages operate about 500 offices, and they stress the geographic reach their computerized listings allow. Yet some 50 independent brokers have a cooperative exchange of their own through a network called Nation-List Network of Business Brokers Inc., in Denver.