The Advantages of Working with an M&A Advisor

An M&A advisor can negotiate the best deal for you and ease the process of selling your company

Selling your company is a life-changing event. Emotions can run high as you consider your legacy and options. You have spent years building your company and the time has come to close the chapter. You could handle the process yourself, but, just as you would entrust your tax filings to a tax advisor and legal contracts to a lawyer, the sale of your company should be left to experts --- a mergers and acquisitions (M&A) advisor. Here are some reasons why you should work with an M&A advisor:


You are hiring a specialist

Selling a company is not your expertise; making widgets is. An M&A advisor is a financial professional or team that specializes in helping companies acquire and be acquired. Unlike an investment bank that primarily works with larger companies with over $250 million in revenue, M&A advisors have years of experience advising smaller clients like you who are looking to exit your company.

These experts work with you to structure the best transaction and see it through completion. They will conduct a financial analysis of your business, compare it against past transactions and similar businesses in your industry, and find the right valuation of your company. With this knowledge, the M&A advisor will negotiate a good deal on your behalf, i.e. a potentially higher price or better deal terms. A good advisor will help you avert post-closing risks.

In the U.S., M&A activity is regulated by the federal government and the state in which the target company is incorporated. You could spend time parsing the Securities Exchange Act of 1934, or you could rely on your advisor who knows the intricacies of the regulations.


You will save time and money

The sale of a company involves a blizzard of negotiations with multiple parties. There are three main categories of negotiations: 1) financial structure; 2) relevant contracts (including Asset Purchase Agreement, Share (Stock) Purchase Agreement, Shareholders Agreement); and 3) terms and conditions of the deal. Negotiation points range from reps and warranties to equitable working capital, cash at close, pension commitments, commercial and regulatory matters, to how and when you, the owner, will receive the proceeds from the sale.

Your advisor will represent your interests during these negotiations to make sure you are happy with your end of the deal. They will also help you avoid mistakes such as trying to hold out for a higher price. A poorly managed deal can cost hundreds of thousands or millions of dollars in losses, fees, and penalties, and drag out the timeline beyond the typical four- to eight-month sale process. These issues can’t all be handled by lawyers; they need to be managed by businesspeople.

Your business is your most significant financial asset. Its sale is not the time to learn on the job.


You will have a smoother sale process

A good M&A advisor is like a supreme ringleader. The advisor will coordinate the entire process from back to front, among all parties involved including the buyer, the seller, the lawyers, accountants, tax advisors, bankers, financing providers, and due diligence vendors. This process can be lengthy and time-consuming. An experienced advisor will get you involved only when necessary.

A smooth process led by your M&A advisor can allow you to focus on running the day-to-day operations of your company and not be pulled away by unnecessary distractions stemming from the sale.


You will have a bigger prospective buyer pool

You may have an ideal buyer in mind, but a good M&A advisor will help widen your pool of potential buyers. Buyers may take the form of a strategic or a financial buyer. A strategic buyer may want to combine your business with their existing operations to expand their product range or geographic reach. A financial buyer may want to transform your business and take it to greater heights.

An advisor can help you find the right buyer based on your company’s circumstances and your personal goals. They will know which buyers are in the market for an acquisition and which ones are not, thus saving time and effort. They will also know how to make your company attractive to different potential buyers.

An M&A advisor will also handle all dealings with the buyer. They identify, screen, and contact potential buyers. They prepare and distribute the information materials including the teaser and confidential information memorandum. They help you respond to potential buyers’ inquiries during due diligence. They help you evaluate the offers you receive and negotiate for a better deal and/or terms in the shortest amount of time.


You have a champion for your deal

A good advisor will work with you to understand your personal goals and timeline. Do you want to stay on to manage your business after the transaction or sail off into the sunset? Are you concerned about your legacy or your employees? An advisor will help to identify and execute the best structure for exiting the business, whether to friends, your management team, or another company.

An M&A advisor can be your personal coach and cheerleader. They work to get you the best deal you can. They are incentivized and focused on getting the transaction closed, as they are largely paid based on the completion of a transaction (known as a “success” fee). Your attorney gets paid whether the deal closes or not, but your M&A advisor wins when you win.

To find out how an M&A advisor can help you sell your company, contact Sharon Heaton at or 703-258-6560.