Target Identification in Fragmented Markets
Category: Buy-Side Advisory | Read time: 4 minutes
Author: Justine Thomas | Published: April 2025
In fragmented markets, many of the most attractive acquisition targets never enter formal sale processes. Owners may not be actively considering an exit, aren’t aware of buyer interest or they prefer to explore options quietly before engaging advisors. Buyers who focus only on marketed processes find themselves in competitive auctions designed to maximise seller leverage, often paying higher prices for businesses that are the easiest for everyone to find.
Ryen Consultants helps buyers build proactive sourcing strategies in these fragmented environments, where numerous smaller players and the absence of clear market leaders create genuine consolidation opportunities. Instead of waiting for processes to appear, Ryen Consultants supports clients in systematically mapping markets, surfacing lesser-known targets and developing outreach programmes that generate proprietary conversations.
Market Mapping Methodology
Effective target identification starts with precise market definition and segmentation. Broad sector labels hide distinct subsegments that serve different customers, follow different economics and may or may not fit the acquisition thesis. By breaking the market into clearly defined niches aligned with strategy, Ryen Consultants identifies where to search, building upon the initial determination of target attributes to seek.
Once segments are defined, comprehensive “universe building” extends beyond obvious, visible players. That can mean drawing on industry bodies, trade media, customer and supplier references, regulatory filings and employment data to reveal smaller companies that do not appear in standard databases. From there, structured filtering and prioritisation ranks targets by strategic fit, commercial attractiveness and practical feasibility so resources focus on the most realistic and valuable opportunities.
Approach Strategy
Contacting owners who are not in a process requires a different approach to dealing with intermediaries in a formal sale. Timing matters: companies facing operational challenges, leadership transitions or strategic crossroads are often more receptive than those enjoying a period of stability. Perfect timing is impossible, so Ryen Consultants typically recommends regular, disciplined outreach rather than waiting for a “perfect moment”.
How a buyer introduces itself also shapes the response. Initial contact works best when framed as a confidential, exploratory discussion around best strategic fit, not an immediate demand for a sale decision. Messages should demonstrate concrete understanding of the target’s business and a specific value proposition, whether that is market access, growth capital, capability combination or a succession solution, rather than generic “we’d like to buy you” language. Careful use of direct, senior-to-senior engagement preserves confidentiality and avoids unsettling staff, customers or competitors.
Relationship Development
In fragmented markets, the first conversation is rarely the one that produces a transaction. Productive relationships often develop over months or years, as owners become familiar with a potential buyer and their own circumstances evolve. Sustained engagement – sharing relevant market insight, keeping owners updated on the buyer’s capabilities and maintaining a consistent point of contact – positions the buyer as a natural first call when an exit or partnership is eventually considered.
Ryen Consultants emphasises adding value before any deal is on the table. Facilitating introductions, exchanging perspective on sector trends or offering thoughtful feedback on strategic questions demonstrates a partnership mindset rather than a purely opportunistic approach. Over time, this patient, relationship-led model can create exclusive situations outside auctions, reduce competitive tension and improve negotiating dynamics.
Competitive Advantages of Proactive Sourcing
Compared with reacting to occasional marketed processes, disciplined target identification in fragmented markets offers clear advantages. Proprietary or lightly contested situations often come with more attractive pricing and structures, and earlier engagement provides more time to understand the business before compressed diligence periods begin. It also surfaces deal blockers, such as ownership disputes, valuation gaps and structural complexities, early enough to address them or walk away without sunk process costs.
By combining structured market mapping, thoughtful prioritisation and long-term relationship building, Ryen Consultants helps buyers turn fragmented markets into reliable pipelines of viable opportunities. This proactive approach creates differentiated deal flow that supports disciplined capital deployment and stronger buy-side outcomes.
