This article is a reprint of an article from our parent company, M&P Asia.
Authored by Truong Ngoc Son from M&P Asia (M&A Consultant / Tax Expert / UK Chartered Certified Accountant)
When business owners consider selling their company, they might feel inclined to manage the transaction independently, much like a homeowner trying to sell a property without a real estate agent. However, selling a business is vastly different from selling property. The stakes, complexities, and potential impacts on the business, employees, and overall market perception are much higher. Hiring a specialized Mergers & Acquisitions (M&A) advisor can make all the difference in ensuring a smooth, successful sale that maximizes value.
An M&A advisor plays a crucial intermediary role, managing the complicated processes involved in a M&A transaction. The advisor’s goal is to help business owners deal with the complexities of selling their company, particularly if they lack the resources or expertise to handle these tasks internally. From market research and business valuation to preparing professional materials and facilitating negotiations, M&A advisors provide comprehensive support and ensure that each step aligns with the seller’s goals while considering market realities.
M&A advisors bring together a team of experts who work closely with the client’s existing advisors to deliver a full-service package. This includes not only financial aspects but also the interests of employees and the broader business context. Advisors are essential for maintaining confidentiality throughout the process, safeguarding the business’s reputation and stability in the eyes of employees, competitors, and potential buyers.
For many small to medium enterprises (SMEs) without dedicated M&A personnel, having an advisor on board is invaluable. Even large organizations with established financial and strategic teams often rely on M&A advisors for their specialized expertise and networks.
One study conducted by the University of Alabama and Portland State University analyzed over 4,000 transactions and found that sellers who engaged investment bankers often received premiums of about 25%. These advisors’ extensive buyer networks and experience can be instrumental in identifying the right buyer, negotiating terms, and managing due diligence, often leading to a higher valuation than a business owner could achieve independently.
The financial benefits of hiring an M&A advisor go beyond initial valuation increases. Working with a professional advisor provides fewer risks in critical areas like warranties and indemnifications when negotiating Sales and Purchase Agreement (SPA). Business owners without an advisor might inadvertently leave significant money on the table or accept less favorable conditions, impacting the company’s sale price and long-term outcomes.
A skilled M&A advisor brings more than just transactional expertise; they offer a vast network of potential buyers and valuable market insights that may not be accessible to most business owners. For instance, private equity investors and institutional buyers, who are often former investment bankers themselves, commonly engage advisors when buying or selling businesses. Their experience highlights the critical role that expert negotiation and access to the right buyer networks play in successful transactions.
Final Thoughts
Selling a business is a significant undertaking that requires a unique set of skills and extensive networks. An M&A advisor brings essential expertise, experience, and market knowledge that can lead to a higher valuation and smoother transaction. While some business owners may attempt to manage this process alone, they risk undervaluing their business and facing increased transaction risks. Partnering with an M&A advisor is an investment that often pays for itself through a more efficient process and a higher sale price, allowing business owners to transition smoothly while preserving the legacy of their company.
Even if you’ve already started the sale process on your own, it’s never too late to contact an M&A advisor. Whether you’re in the early stages of planning or actively in discussions with buyers, advisors can step in, providing essential insights and support to help ensure the deal aligns with your objectives and market standards. By partnering with an M&A advisor, you can focus on maintaining daily business operations while the advisor navigates the complexities of the sale, maximizing both the sale price and the terms.
ABOUT US
At M&P Asia Consultants (MPA), we are dedicated to helping business owners navigate the complexities of M&A with ease and confidence. Backed by the extensive expertise of Miura & Partners, our team offers a “one-stop solution” that covers every aspect of the M&A process—from legal, tax, and financial considerations to licensing and labor issues. Our deep knowledge of Asia and emerging markets allows us to provide tailored, high-impact strategies that maximize value for our clients.
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