When selling your business, having a solid support team is crucial. While having an accountant and a lawyer is essential, hiring an M&A advisor can significantly enhance the outcome of your sale. Despite common misconceptions, the role of an M&A advisor is distinct and invaluable, even when a potential buyer has approached you directly. This article highlights the main benefits of hiring an M&A advisor and underscores why they are worth the investment.
Why an M&A Advisor is Essential
A recent Forbes article, “The Return on Investment of Hiring an Investment Banker,” supports what we at MGroup Corporate Finance have been advocating for years: hiring the right M&A advisor results in a substantial financial payoff. Various studies back this claim, showcasing the significant advantages of enlisting professional M&A guidance.
Hiring an M&A advisor can significantly enhance the outcome of your business sale. From securing higher valuation premiums to ensuring a competitive bidding process and finding the right buyer, their expertise is invaluable. Don’t underestimate the importance of this role—investing in an M&A advisor can be the key to a successful and profitable business sale.
Return on Investment
An M&A advisor is more likely to get you more money. Research shows that private sellers receive significantly higher acquisition premiums when they retain advisors, typically around 25% more. Additional research shows that 84% of mid-market business owners who hired an M&A advisor reported that the final sale price for their business was equal to or higher than the initial valuation estimate provided. An M&A advisor has the expertise to value a company properly.
Expert Negotiation and Strategic Selling
M&A advisors bring unparalleled expertise in selling businesses. While you might be an expert in your industry, M&A advisors excel in the intricacies of business sales, ensuring you get the most value from your deal. They are adept at navigating the complexities of the sale process, including due diligence coordination, managing the data-room, and rigorous deal negotiations.
Selling a business is a demanding process that can take up to 1,500 hours. By handling these extensive tasks, M&A advisors allow you to stay focused on running your business, which is vital to avoid any performance decline, reducing stress and preventing burnout.
Creating a Competitive Bidding Process
One of the significant advantages of hiring an M&A advisor is their ability to create a competitive bidding process. Buyers recognise that dealing with a knowledgeable advisor means the seller is fully committed to the sale and therefore prepared to maximise the deal’s value. This competitive environment ensures that you receive the best possible offers and a choice of buyers.
Ensuring a Good Fit and Avoiding Seller’s Remorse
Finding the right buyer is about more than just the financials; it’s also about ensuring alignment and synergy with your company’s future vision. An M&A advisor helps you find a buyer who fits well with your company’s strategic goals and culture, reducing the risk of regretting a sale in the future. After dedicating years to building your business, you want to ensure it continues to thrive in the right hands.
Let’s Work Together
Whether you’re in the early stages of considering an exit or have already embarked on the journey, contact Partners Mark Crossfield (07780 957631) or Geoff Pinder (07717 874357) for a confidential discussion. We understand the importance of finding the right advisors. If you choose to work with us, you’ll be supported by a team who understand what you’re about to go through, will be on your side throughout the journey, and will work tirelessly to get you the most favourable outcome.