Merger and Acquisition M&A Advisor gives presentation in conference room.

9 Things You Should Know About Working With an M&A Advisor

There are many factors you should consider when talking to and finding the right merger and acquisition advisor. In this blog, you’ll find what things you should know about before working with a M&A Advisor. 

1. Sell-Side Process

The sell-side process is dependent on the goal set by the seller and M&A advisor. There are different transaction types:

  • Traditional sale- In a conventional sell-side M&A process, the sell-side advisory team assists the seller in reaching the broadest groups of potential buyers. 
  • Limited auction- This type of auction consists of a much smaller group of selected bidders.
  • Exclusive negotiations- When a seller negotiates with just one buyer, the process is highly customized and takes less time to close a transaction. 

2. Buy-Side Process

M&A advisors will discuss the buyer’s acquisition criteria and objectives and perform market research and narrow down possible sellers that align with the buyer’s strategic goals. 

3. Earnout Structure

An earnout structure is a provision where sellers must “earn” part of the purchase price following the acquisition.

4. The Right Time to Sell a Business

In general, it’s better to sell when your business’ revenue is in the growth phase. You may also consider the market conditions and overall economic climate.

5. Transaction Timeline

Every transaction is unique and follows its own timeline. However, transactions usually fall within a specific range, which can be anywhere from a few months to twelve months.

6. Should You Hire an M&A Advisor for the Transaction?

An M&A advisor can assist you in every phase of the transaction. You can benefit from their expertise in researching and sourcing buyers and sellers. 

7. Picking the Right M&A Advisor

Choosing the right M&A advisors requires knowing your goals and personal preferences. The M&A advisor should also be transparent on all matters.

8. How to Prepare Your Agency to Sell

You may consider an advisory team, and you may also want to:

  • Establish processes and have systems in place
  • Prepare your agency for future growth
  • Improve your profit margins
  • Establish a senior management team (if applicable)

9. The Value of Your Agency

An advisor needs to assess the size, all of its financials, services, capabilities, and growth. Some factors that can affect the value of your agency are revenue growth, scalability, and profitability and cash flow.

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