Finding the Right M&A Advisor

Finding the Right M&A Advisor

When it is time to sell your business, the standard mentality is the desire to maximize its value and get the biggest price tag. However, cutting costs by attempting to sell the business on your own could cost you thousands, if not millions of dollars, due to unforeseen expenses and lower valuations. There is no one out there who knows your company better than you but on the flip side, there is also no one who knows the mergers and acquisitions (M&A) transaction process better than a trusted M&A advisor. Here are some important criteria to keep in mind when choosing such an advisor.

Resourceful and Connected

It is key to find an M&A advisor who has the right set of resources to complete the M&A transaction in the most efficient way possible. For example, a wide spread global network of professional connections is an incredible tool in today’s globalized market. A technology company based out of Ottawa might very well spark the interest of a buyer in the Philippines; the question is whether your advisor has the resources to find this buyer. Unlike independent M&A firms, M&A advisories that are part of larger accounting firms have access to networks as well as exclusive private resources.. These resources range from tax planning advice and private industry data to connections with fellow business advisory and accounting firms around the globe.

Relevant and Experienced

Perhaps the most important characteristic of a suitable M&A advisor is relevant expertise. It is a competitive advantage if the advisory team has experience dealing with your business’ industry. As well, it is important to examine the experience of each key team member to make sure the team has the right talent to ensure your M&A transaction is successful. The following are examples of some vital qualities your M&A advisor should exhibit:

Negotiation and Management Experience

Leading both the buy-side and sell-side to an optimal solution is one of the most difficult tasks of an advisor. The advisor should have a record of managing M&A transactions while maintaining strict confidentiality. When representing the sell-side, creating a competitive bidding process can generate greater interest which results in multiple valuation expectations. Orchestrating such a process is a very intricate matter that requires patience and experience. For example, bringing up the interest of other buyers too early during negotiation could spook the acquirer, and waiting too long to bring it up could chill the interest of buyers. When choosing your M&A advisor, ensure they have the right experience, the resources available to manage the deal, and a personality to get the deal done.

Accounting and Business Valuation Experience

An ideal M&A team should have at least one member who has a background in accounting and business valuation, preferably with a CPA or a CBV designation. This experience will be extremely important when maximizing the value of your business and performing the due diligence stage of the M&A transaction.

Marketing and Graphic Design Experience

This particular aspect of a successful M&A team may seem odd however, it is crucial during the initial stages of the deal. Having a team member who is able to put together quality graphic representation of your business’ strengths and synergistic opportunities is what will capture and retain the initial attention of buyers and sellers.

Small but Strong

When it comes to choosing an M&A advisor, it is important to choose a firm whose size matches your needs. Even though larger standing teams, made up of 20 or more members, may be more effective in certain cases, smaller boutique-style firms, who have a strong core M&A team made up of two to ten experienced professionals, tend to be a more cost effective and efficient option for small and medium sized deals. Boutique firms are likely to be more involved in the deal process and focus on fewer deals at a time compared to larger M&A groups. This focused approach allows the team to concentrate its efforts on your unique M&A needs at more competitive prices.

Once again, remember, no one knows your business as well as you, but, when it comes time to sell that business or buy another one, trust a professional advisor. Choosing the right business advisor to help you buy or sell a business is essential to leading a successful M&A transaction in a cost-efficient and timely manner.

Roma Stepanchenko, M&A Associate
WelchGroup Consulting