Anyone who has participated in a merger or acquisition (M&A), regardless of the person’s role in the transaction, will likely agree that it is quite an ordeal and unlike many other business transactions that one will ever encounter. Company leaders undoubtedly underestimate the complexity of the process, and thus countless folks have sought to go it alone without the advice and guidance of seasoned professionals. It is certainly within the realm of possibility that companies will survive the process relatively unscathed, but that does not change the fact that having the insight of an expert can prove invaluable. Sometimes it is simply worth it to pay the fees for an M&A advisor to help your company work through the process, as they add value in a myriad of ways. Here is what you get when you pay for an M&A advisor:
This may seem like an exaggeration, but there is truth to the notion that bringing a big name on board will help drive up valuation. Advisors who are familiar with the process and make an appropriate assessment of the company and relevant market will have a better sense as to what sort of valuation the business should expect. And, in addition to knowing what to expect, a seasoned professional will have the knowledge, skills, and confidence to demand more. Ultimately, advisors who are regularly involved in these kinds of transactions will know what is acceptable and what is not, but they will also want to ensure that the deals in which they are involved reap maximum value.
Just as having an expert on the team will help with driving up valuation, it may also help with garnering interest. Ideally, advisors will have worked in the business long enough that they bring along some strong connections with potential buyers or sellers, depending on which side of the transaction your company falls. Even if an advisor does not have direct connections, most have a good insight as to how to go about finding the right suitors. Rather than blindly and cluelessly search for prospective deals, it is worth it to pay someone who can hit the ground running on this aspect.
Once the buyers are found, the offers are made, a deal is pursued, and the terms of the deal are ironed out, it can still take a long time for an M&A transaction to actually make it to the closing table. This is due, of course, to things like due diligence, funding, legal matters, and so forth. But, with the right advisor who has the right approach, a strong team of professionals can be put together to ensure that all bases are adequately covered. Having the right people assembled and ready to tackle any and all issues that arise will facilitate a much faster closing.
Agreeing on the financial components of the deal and then actually closing the transaction can be quite a feat, but there is a lot that still has to happen subsequent to signing all of the requisite documentation. There will likely be leadership changes, modifications to personnel and technology, and various other changes needed to accommodate the merging of two separate entities. Hopefully, the money spent on the advisor includes professional advice and guidance on navigating this complicated phase of the deal. There can be some very sensitive subjects to attend to during this time, so it will be a welcome relief to have someone who is a pro at these things helping to ensure that the transition occurs as smoothly as possible.