Off Market Acquisitions

What is the difference between market and off-market purchase?

The main difference between market and off-market purchases lies in how the transaction is initiated and executed:

Market Purchase:

• In a market purchase, the Business is openly advertised or listed for sale through public channels like Business Brokers or Corporate Finance Agents depending on the size.
• Interested buyers can find information about the Business, its price, and other relevant details through those sources.
• The buying process typically involves competitive bidding or negotiation among multiple potential buyers, with the price being influenced by market demand and supply dynamics.
• Market purchases are more transparent, and there’s often greater visibility into comparable transactions and pricing benchmarks.

Off-Market Purchase:

• In an off-market purchase, the asset is not publicly advertised or listed for sale. Instead, the seller may directly approach potential buyers or engage in negotiations with a select group of interested parties.
• Off-market purchases are often initiated through private channels, such as direct outreach by the seller, networking, or through intermediaries like Wealth Managers or Business brokers who have access to off-market opportunities.
• The transaction may be conducted discreetly to maintain confidentiality or to explore strategic opportunities without alerting competitors or the public.
• Off-market purchases may offer more flexibility in terms of negotiation and deal structuring, as there is typically less pressure from competing buyers and fewer constraints imposed by market dynamics.