An owner thinking about selling a well run business will hear from plenty of buyers. Private equity firms, family offices, holding companies, strategic acquirers and search funders all want the same kind of company. Most of them pull targets from the same databases, sit through the same conference panels, and promise to preserve the same legacy.
For a holding company, finding the business is the easy part. Getting the owner, their broker, or their accountant to call you first when they’re ready to talk is harder, and a bigger target list won’t do it on its own. You need several routes into the market and a credible reason to be on each one.
We call this the Kraken Approach. The name is a little theatrical. The idea is simple: build the acquisition pipeline through three connected channels so no single one has to carry the load.
Relying on one channel
Most acquisition teams have a favorite way to find deals. Some are good at direct outreach: they map a market, contact owners, and stay in touch for years. Some have deep broker and banker relationships and see a steady flow of marketed deals. Others live on introductions from operators, accountants and former colleagues.
All three work. Problems start when one of them becomes the whole plan.
Direct outreach alone tends to produce a long list of owners who aren’t ready to talk, while good businesses already working with an advisor never reach your desk. Intermediaries alone bring plenty of deals, but you’re bidding against the same buyers on every one. Referrals alone are warm and pleasant, and almost impossible to forecast.
The fix is to run all three and let each one cover the others’ gaps.
The three arms
The Kraken Approach combines direct owner outreach, intermediary relationships, and a network of industry contacts we call river guides.
As a rough starting point, a business development professional might split their time like this:
- 50% on direct owner outreach
- 30% on brokers and M&A advisors
- 20% on river guides and industry relationships
These numbers are a planning assumption to adjust, and nobody should mistake them for an industry benchmark. A holding company entering a new market will probably spend more time up front mapping companies and building its outreach list. One with an established portfolio and good banker coverage might lean the other way. Set the mix based on the mandate and your existing relationships, then adjust as you see what each channel produces.
Arm one: direct owner outreach
Direct outreach lets you go after businesses that fit your strategy whether or not they’re for sale.
Start with the acquisition thesis: which markets you want to enter, which capabilities you’re buying, and what makes a company a plausible fit. Then do the homework on each business before you reach out. An owner who has spent twenty years building a company can spot a mail merge sent to several hundred of their closest competitors.
A good first conversation rarely produces a deal. You might learn the owner wants to keep growing for another decade, is grooming a successor, or is quietly curious about what a partner could do for them. All of that is useful.
The upside is that you get to know the owner before anyone else is in the room. The downside is that many owners have no interest in selling yet, so this arm runs on patience. Early contact also doesn’t lock anything up. The owner may already be talking to other buyers or may hire an advisor later.
Arm two: brokers and M&A advisors
Intermediaries show you companies your own research would have missed. They usually represent owners who have already decided to explore a sale or want help weighing their options, and they can tell you a lot about the business, the owner’s priorities, and how the process will run.
Most acquisition teams already have enough emails. The aim with brokers is to be a buyer they understand and trust.
That starts with clear criteria. Which sectors? What size range? Are you comfortable with the owner staying on? Which situations are a hard pass? The more specific you are, the fewer wasted teasers you’ll get.
It also means answering quickly. When a broker sends you something relevant, reply promptly and thoughtfully, even when the answer is no. A short explanation of why a deal doesn’t fit makes the next one a better match.
Some intermediated deals go to a wide list and some go to a handful of buyers. Either way, the buyers who get remembered are prepared, honest about their level of interest, and respectful of the owner’s process.
Arm three: river guides
A river guide is someone who knows the people, businesses and currents of a market: an accountant with a book of family owned clients, a retired executive who knows everyone in the industry, a commercial lender, an attorney, a consultant, or the CEO of one of your portfolio companies.
Most river guides don’t spend their days thinking about acquisitions. Their usefulness comes from the trust they’ve built and how much they see. They may know an owner who is thinking about succession or wants a growth partner. They often know which companies have excellent reputations and never show up on anyone’s target list.
Don’t open by asking for deal flow. Learn about their work and the clients they serve, explain what your holding company looks for and why you’re a credible owner, and look for ways to be useful to them in return.
When a guide makes an introduction, they’ve put some of their reputation behind you. Keep them posted as appropriate, protect the owner’s confidentiality, and do what you said you’d do.
These relationships can produce excellent introductions, but they take time to build and they don’t run on a schedule.
How the channels connect
In practice the three arms overlap constantly. An owner you contacted directly hires an M&A advisor a year later. A broker brings you a deal because one of your portfolio CEOs vouched for you. An accountant introduces an owner who is already talking to two other buyers.
So your pipeline needs more than a single “source” field. Record how each opportunity first reached you, who has a relationship with the owner, and who else is involved. That avoids the awkward double approach and lets you handle each conversation with some care.
It also tells you more about the market. Owners you reach directly will tell you how they think about succession. Advisors will tell you what sellers are asking for in live processes. River guides will tell you who has a good reputation locally and who doesn’t. Put together, those views give you a much better read than any one channel.
Following up
Data tools have made it cheap to find companies and send outreach, so owners now get several near identical messages from buyers every month. The buyers who get a second meeting give the owner a reason to take it.
That means knowing why their business fits and being straight about how you own companies: what happens to management and employees, whether the company keeps its name and identity, and what role the owner would have afterward.
It also means keeping the same standard six months later. That could be a handwritten note after a meeting, an update on a portfolio company, or an article on a topic the owner brought up. Occasionally it means leaving them alone for a while. Match the follow up to the relationship.
Putting it together
An acquisition pipeline shouldn’t depend on one person’s inbox or one source of introductions. Direct outreach builds your own relationships. Intermediaries bring access to live deals and experience with sale processes. River guides bring trusted introductions and inside knowledge of the market. The right balance will differ from firm to firm. Give each channel enough attention to develop, and pay attention to what each one teaches you.
Serica & Co. helps professional acquirers build sourcing strategies through market mapping, target research, owner outreach and deal origination. If your holding company wants a three channel acquisition engine, we can help design the approach and show you where more research, outreach or relationship work will pay off. Visit our Buy-Side Services page to start a conversation.