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What Is Third-Party Acquisition?

Third-party acquisition is a type of alternative investment in which one party purchases and takes ownership of another. These parties are often private equity firms and individuals who opt to purchase an established company with a proven business model that may need investment and strategic direction in order to grow. Investors are often required to stick with their investment for several years, which can be financially demanding. This is why only large institutions and individuals with high net worth typically have access to this class of investments.

In addition to individual investors who have the means, equity funds are among the types of investment firms that will engage in third-party acquisitions. Equity funds are groups of investors who make up diverse investment partnerships. These funds can use their collective assets to buy and manage mature companies for reselling. They may specialize in distressed investing, growth equity, specific sectors, secondary buyouts, and carve outs, among other options. Once a business is purchased and overhauled, investors will then look to resell at a profit.

The third-party moniker comes in because the acquisition is governed and directed by means of a professional who acts in the interest of their client. In this case, Dottore Companies, Inc. is that third party. Our clients are typically equity firms and individuals.

How A Mediator Can Help

As part of an acquisition that is focused on an eventual resell, investors need to establish a plan to increase the investment’s worth well before the deal is finalized. Whether that includes cost cuts, restructuring, or a complete overhaul of the company, strategy and tactical knowledge are vital to the investor’s success. This is where a mediator becomes invaluable.

Pre-deal consulting services paired with negotiating expertise and a perspective informed by experience allow a mediator to leverage business networks for clients’ ongoing success. Thorough due diligence means that clients can enter an acquisition with full understanding of the state of the company and what needs to be done to turn it around and create profit. 

First, a mediator will work to ensure that a business aligns with their client’s vision, mission, and diversification and profit margin goals. They will then help to leverage the best of a company’s current staff and management while also digging into the company’s expenses, taxes, and contingencies. Verifying the seller’s details are also vital–it helps to remove doubt and underscore value. Once the client is satisfied that the investment is solid, the mediator drafts a letter of intent on their behalf that will outline a preliminary commitment to do business. This key document will outline terms and conditions and work out the most important aspects of the deal. These may include:

  • Unnegotiated points
  • Purchase price, timing, and method details
  • Division of assets
  • Terms of any noncompete, nondisclosure, or non-solicitation agreements

A mediator will also take steps to ensure that both sides–sellers and investors–are legally protected via an indemnity agreement. Other legal or tax requirements specific to the state of purchase are also taken into consideration. And as part of every third-party acquisition, mediators help to keep relations friendly while preventing potentially emotional issues from developing and hindering the acquisition. By working with an experienced mediator, investors can hope to earn a good return on their investment while at the same time allowing for easy divestment with a clear exit strategy in sight.

Rely on Cleveland’s Expert Receivership and Mediation Firm

Dottore Companies is a receivership and mediation firm with offices in Cleveland, Ohio and Washington DC. We specialize in the field, having developed a depth of expertise and breadth of resources to help resolve the toughest challenges related to third-party acquisitions.

After decades of business experience, we know what investors are looking for in third-party acquisitions, and we are committed to delivering the best possible opportunities for return on investment. Our proprietary methods, robust partnerships, and savvy approach to problem solving allow us to protect client assets while maximizing recovery. From comprehensive acquisition strategies to on-site transition services, we offer it all on an expedited timeline.

If you are looking to acquire an investment business but need direction, please contact us today to learn more about our third-party acquisition services.

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