02 Jul


  • Posted by Clear Rock
Benefits of Using an M&A Advisor

As an entreprenuer you are independent. You’ve built a business up- perhaps from scratch- and now it’s time to sell it. You can do that on your own, right?

Perhaps, but there are a number of good reasons why thats likely not the best, not to mention cost-effective, idea.

Here are a few items you might consider:

1.Because You Have a Business To Run – As CEO your utmost concern is always to ensure that your business remains profitable, growing, and running smoothly. Personally managing the details of an M&A process is a highly time consuming undertaking and attempting to do both roles concurrently means that you are unlikely to be effective at either. Hiring a deal advisor to manage the M&A process for you will allow you to remain focused on your number one priority: running your company.
2.Because an Advisor Will Know the M&A Market – You can easily explain to potential buyers why you would be a great fit for their business and there is no better expert on your company than yourself. But getting the best M&A deal terms requires a professional that has extensive experience in the M&A market for your sector, first-hand knowledge of how to position firms like yours for a sale, and most importantly, understands what terms you ought to be getting and how to get them for you.

3.Because You Require Specialized Marketing – You may have sales teams that know how to market your products and services, but marketing your business for an acquisition requires a very specific mix of technical, creative, and financial skills. Getting the marketing approach right is all the difference in getting a favorable valuation and deal terms for your company.

4.Because the Right Advisor Will Know the Right Buyers – The right advisor will not only personally know some of the major players in your industry, but they will have spent time working in it as well. Getting yourself positioned in front of parties that are serious buyers and who will know how to help your business grow is critical.

5.Because You Need To Maintain Confidentiality – Knowledge within your company that you are interested in selling can have a number of disruptive consequences, particularly if news is divulged early in the process. Managing an M&A engagement internally makes maintaining confidentiality almost impossible. An outside M&A advisor can place strict controls on who receives information about your interest in selling and ensure that sensitive information is not errantly disclosed.

6.Because You Need Leverage To Negotiate – Many things can and do come up for debate during an M&A process. The employment contracts for personnel, their health plans, how much working capital is considered excess? Will this be a stock sale or an asset sale? What is the net consideration? An M&A advisor will be best positioned to understand the nature of these consequences, how to negotiate in your favor, and when required, ‘get tough’ with the buyer and take ownership of difficult negotiating points so that you may maintain cordial relations with them.

7.Because It Can be an Emotional Process – M&A can at times be an emotional process for both the buyer and seller. Having a third party around to keep everyone focused an on track can help ensure that rash decisions are not taken in an emotional moment.

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