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A Guide To Sourcing An M&A Advisor For The First Time

M&A Advisor: What Are We and What Do We Do?

Probably the most simplistic answer is that we guide clients through the – sometimes daunting – world of mergers and acquisitions. M&A firms take an active approach to achieve a transaction, we add value to merger and acquisition transactions by managing the sale process from start to finish.

Our role involves negotiating transactions, sourcing buyers and helps to limit distractions for the owner/management team. My strong belief is that we also establish the seller’s credibility in the market.

We act as the advisor in a business sale transaction. At Starling Corporate we primarily work on behalf of the company initiating the sale, making us sell-side brokers. A typical client is an individual or group seeking to sell some or all of their private company.

Our role is to provide a platform that connects companies for sale with verified buyers.

Understanding the steps of selling a business is relatively straightforward, however knowing how to effectively market and therefore increase the value of a business is something wholly different.

 The Starling Corporate Process   

  •   Thoroughly explain each phase of the transaction process to ensure that you understand what to expect
  •    Provide you with a valuation for the business to give you an indication as to what the business is worth
  •    Market your business to as many potential interested buyers as suitable.
  •    Manage the responses, vet potential buyers and ensure that only those buyers with a real interest in acquiring your business make it to the next stage of the process
  •    Arrange and attend meetings
  •    Work with other third parties such as lawyers to steer the process ensuring that all the necessary due diligence and legal documentation is prepared.
  •    Negotiate the sale of the business on our clients behalf
  •    Achieve the very best possible outcome in terms of price for the seller.
  •    Help the seller choose the buyer that’s the best fit

 

By taking ownership of all the above we will ensure that the management team are not distracted and can continue to run the business.

This element is key in ensuring the businesses continues successful financial and strategic performance; a critical factor that will impact the final price you achieve for selling your business.

Our overall goal is to create a competitive buying environment to ensure that the selling company gets the very best outcome possible.

sourcing an MA advisor

When is the best time to involve an M&A Adviser?

In a perfect world, the best time to involve Starling Corporate is at the very beginning, whilst you are first starting to think about selling your business.

This will give us maximum time to prepare the business properly for market.

This early introduction can help to maximise the company’s value. Of course, this isn’t always practical, as for example, you may have received an unexpected approach. In this scenario we would still suggest bringing us into the fold so that we can implement our processes and create the competitive buying conditions that will ultimately add value to the business.

To summarise we would say the earlier the better,  but whatever stage you are at it is never too late to bring in an M&A adviser.

Choosing an M&A Advisor

There’s a lot to consider when choosing an adviser, here are the key elements to take into consideration;

Process

  • Fully understand what their process is
  • Ask to see case studies
  • To know how they will keep your sale confidential

Experience

  • Do they fully understand your business and your industry?
  • How will they market your business?
  • Have they sold similar businesses to yours?
  • How many deals have they closed?
  • What contacts do they have for potential buyers?
  • Ask for references.

 

Fees

What are their fees?

It is important to understand how those fees are structured, and what do they cover?

How are the fees compared with the competition?

Team

  • Who will you be dealing with on a day to day basis? At Starling Corporate all clients will have their project managed at director level.
  • Its important to both like and trust your advisor.
  • Will your transaction get the time and energy it deserves?
  • What are the individuals experiences and track record?

How much will all of this cost me?

Selling a business is a time-consuming exercise, and in general, it can take anywhere from 6-18 months.

Generally speaking, proven M&A advisers will charge two fees; a retainer or engagement fee and a separate success fee. These fees can vary, depending on the size, type, and anticipated value of the company.

Most Advisors will expect a retainer fee to secure their services. – Importantly, Unlike our competitors, Starling Corporate have made this fee deductible from the final sale fee.  The objective of this fee is simply to commit the seller and cover the adviser’s fixed costs.

The success fee is typically a % of the total transaction value, this incentivises the M&A adviser to achieve the highest possible price for the seller.

M&A Advisor service

 

To summarise

At Starling Corporate our role is to provide our clients with the necessary professional representation, that will not only act as proof to a buyer that you are a serious and committed seller, but will also create a competitive buying environment benefiting you and key to the companies final sale value.

About the Author:

Chris became involved in M&A after being part of a successful family business that was acquired by a trade buyer. This has allowed for valuable insight into the process from a practical viewpoint and allows for real life advice to be given. Mr Davies can demonstrate expert knowledge across all major sectors and has particular interests in Oil & Gas, Construction, Transport and Services.

To sell your businesses, or for more advice on selling please contact the author at davies@starlingcorporate.com