How to Build an Acquisition Target List

Most acquisition journeys start in the wrong place: looking at what is currently for sale. While business brokerages and online marketplaces are a valid starting point, they represent only a tiny fraction of the potential targets. A list built solely from on-market listings is a list of companies that everyone else is also looking at, often leading to competitive bidding and inflated prices.

A sophisticated acquisition target list is proactive rather than reactive. it is built around a specific strategic thesis and includes 'potential strategic targets'—businesses that are not currently for sale but whose acquisition would make fundamental commercial sense for your group. This article sets out the process for building such a list, from the initial filters to the final prioritisation.

Phase 1: Defining the Filters

Before you look at a single company, you must define what a 'good' target looks like. This is where your acquisition thesis comes into play. Without clear filters, target identification becomes a time-consuming exercise in looking at interesting but irrelevant businesses. Effective filters usually fall into four categories:

• Strategic Filters: What capability, market share, or geography are we trying to add? (e.g., 'B2B software businesses serving the UK logistics sector').
• Financial Filters: What size of business can we realistically acquire and integrate? (e.g., 'Turnover between £2m and £10m with at least 15% EBITDA margin').
• Operational Filters: What kind of management structure do we need? (e.g., 'Must have a functional mid-management layer independent of the owner').
• Cultural Filters: What kind of company values and working styles will mesh with ours?

The free Build My Acquisition Thesis tool can help you settle these filters before you begin your research.

Phase 2: Broad Market Mapping

Once the filters are set, the goal is to identify *every* business that fits them, regardless of whether they are known to be for sale. This requires a multi-layered approach to research:

1. 01Industry Databases & Directories: Using specialist tools to pull lists of companies by SIC code, location, and size.
2. 02Trade Media & Awards: Identifying 'rising stars' or established players that are active in your niche.
3. 03Supply Chain Analysis: Looking at your own suppliers, customers, and competitors to see which businesses are performing well.
4. 04LinkedIn & Professional Networks: Identifying companies with growing teams or recent leadership changes.
5. 05Commercial Research Services: Using a service like the Acquisition Opportunity Engine to surface off-market targets that match your thesis but aren't visible on broker sites.

At this stage, you are aiming for volume. You want a 'long list' that captures the breadth of the market opportunity.

Phase 3: Data Enrichment

A name on a list is not a target. For each company on your long list, you need to collect enough information to decide if they are worth a closer look. This data typically includes:

• Estimated financial performance (using Companies House data or industry benchmarks).
• Key leadership and ownership structure.
• Product/Service range and customer focus.
• Recent strategic moves (new offices, new products, key hires).
• Any public signals of potential change (succession issues, shareholder changes, etc.).

It is important to note that Evans Sales Consultancy provides this commercial research and target intelligence. We do not provide investment advice, corporate finance advice, valuations, or legal/tax due diligence. Identifying a company as a target never implies it is for sale, and our research is based on legitimate public signals, not private inside information.

Phase 4: Prioritisation (The Short List)

Now you move from the 'long list' to a 'short list' of high-priority targets. This is done by scoring each company against your original filters and adding a 'proximity' or 'accessibility' score.

Accessibility signals are not proof that a company wants to sell, but they help you decide where to spend your initial outreach energy. A company with an aging owner and no obvious successor is a more logical 'first approach' than a company that was recently acquired by a large competitor.

Common Pitfalls in List Building

The most common mistake is building a 'static' list. The market moves; companies grow, fail, or get bought by others. A target list must be a living document that is reviewed and updated at least quarterly.

Another mistake is being too narrow or too broad. If your filters are too tight, you might miss excellent 'adjacent' opportunities. If they are too broad, you will waste time on irrelevant targets. The 'Goldilocks' zone is a list that gives you 20-30 genuine high-quality targets that you would be genuinely excited to acquire.

Conclusion

A high-quality acquisition target list is the engine of a successful growth strategy. By moving beyond what is 'for sale' and mapping the market strategically, you gain control over your growth rather than waiting for the right opportunity to appear in an inbox. It requires discipline, research, and a clear understanding of your own strategic goals, but the reward is a pipeline of opportunities that your competitors haven't even seen yet.