F.A.Q.s
I have an attorney/accountant why do I need a mergers & acquisition advisor?
The primary purpose of attorneys is to draft appropriate purchase & sale documents. A good attorney will advise and protect a client legally within the framework of a successfully negotiated transaction. The American legal system trains attorneys in adversarial negotiation tactics and the involvement of an attorney too early in the process can strain otherwise productive discussions. Additionally, few attorneys are qualified to value a company and most have had little or no practical business experience.
Accountants are best used to perform an audit, to
help interpret financial statements and to provide advice on the tax
consequences for the buyer and seller. Accountants are trained
to create historical financial statements and review tax codes, both
of which are “factual” items.
A good M&A Advisor will create value by showing buyers what is not
in your financial statements. Additionally, they will help keep the
selling process confidential and give you insight to market trends.
What services do Business Brokers/M&A Advisors perform?
Although services vary by firm, “typical” services provided to a potential Seller might include the following:
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Review your business with you (operations, financial, sales & marketing, etc.) to help understand its true value
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Discuss you goals on a potential exit and the different types of exit strategies
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Develop a comprehensive Information Memorandum that highlights your company’s unique strengths
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Market the company professionally to potential accredited buyers
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Provide negotiation & deal structuring advice
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Maintain a confidential selling process
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Provide overall deal management from initial discussion through closing
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Allow you to stay focused on running your business
How much do Advisory services usually cost?
Most intermediaries base their fees on a percentage of the transaction value which aligns their goals with the Sellers – to maximize value. Typically, the larger the transaction, the smaller the percentage charged. In addition to a success fee, more firms are starting to utilize an up-front retainer fee to cover their initial costs of working with clients. Fees vary from firm to firm as do the specific services provided. The APMAA encourages prospective clients to compare not only fee structure but actual services performed. Since every client is unique and services vary from each firm, there is no “standard” fee and apples-to-apples comparisons are difficult to make.
As in most situations, you get what you pay for
and a “bargain” fee might get you sub-par services. Ask
yourself this question, if you were going to get heart surgery,
would you want the best surgeon for your condition or the cheapest?
Choosing a professional M&A Advisor on perhaps the biggest financial
transaction of your life should be no different.
I have other questions, where can I get answers?
Check out the other information resources, including articles, on our web site. Additionally, you can post questions in our public forum area and get answers from our members and other visitors. Still have more questions – e-mail us and we will be happy to respond: information@apmaa.com.
