The Role of M&A Advisors in Mergers & Acquisitions
Dani Sherrets, M&A Manager
February 22, 2023
One of the most popular avenues for a company to grow or restructure is through mergers & acquisitions (M&A). You could probably manage to sell your business on your own or with the help of your attorney/accountant, but should you? Selling or buying a company is a complex, nuanced, and sometimes long process that requires expert insight. To help you better understand how an M&A advisory firm can help your business during a liquidity event, we have broken down a few of their key responsibilities.
Who are M&A Advisors?
M&A advisors are professionals who advise on and execute transactions that primarily involve the sale or acquisition of a business and debt and equity financing. They guide you through the smoothest possible process to end up with the most optimal outcome.
What Services Do M&A Advisors Offer?
The services provided by an M&A advisor can be invaluable for a business looking to make the most out of a sale, acquisition, or capital-raising opportunity. Whether you're looking for advice on strategy or execution, M&A advisors will ensure that every aspect is covered and keep your best interests in mind throughout the process. Depending on your needs, some services they may provide include:
Establish a value for the company
M&A advisors help you understand what your business is truly worth by evaluating historical performance and running valuation models.
Assess/analyze market conditions
M&A advisors have valuable industry knowledge and access to the most current data on market trends and transaction comparables (comps).
Develop an acquisition/exit strategy
After determining a range of values, M&A advisors can assist with exploring potential acquisition/exit or funding options based on the client’s needs and objectives.
Prepare necessary documentation to strategically market the company
Advisors put in a great amount of work in preparing marketing materials to best position the business for sale utilizing curated company background information to attract interest from potential buyers.
Identify prospective buyers/targets
M&A advisors create a competitive process by leveraging their existing relationships to identify the most likely suitors/targets and manage a structured auction process. An auction process involving multiple offers usually drives the receiving bids higher.
Deal structuring & negotiation
Once a Letter of Intent (LOI) has been submitted and accepted, M&A advisors negotiate transaction details such as price, terms, sources and uses and timing.
Manage the due diligence process
M&A Advisors collect, review and provide company information such as contracts, leases, and customer and supplier lists to the other party securely and confidentially.
Coordinate closing activities
The advisors will quarterback the drafting and negotiation of the purchase agreement and oversee the company’s transfer.
Why Should You Adopt Their Services
Value maximization is one of the main reasons to hire an M&A advisory firm to help with a transaction. When the people involved in an M&A transaction are not familiar with the process nuances, there is a high likelihood of signing a deal with unfavorable terms or sellers leaving millions of dollars on the table. Advisors help the sellers to differentiate bids on factors other than the value, which can make a huge difference in the overall outcome of the deal. Additionally, advisors know what to watch for in a process, how to reduce the risk of a deal falling apart, and how to best drive competitive dynamics.
M&A advisors provide invaluable advice and services that help companies make the most of their merger, acquisition, or capital-raising opportunities. Their expertise is supported by extensive financial, technical, marketing and deal negotiation skills, from initial strategy to finding a buyer to execution. Contact us to discuss how Lutz M&A adds value or if you have any questions about the M&A process.
Dani Sherrets is an M&A Manager at Lutz. She began her career in 2014. Dani is responsible for supporting the execution of merger and acquisition transactions and business valuation services. She assists clients across various industries with valuation analyses, financial modeling, industry research, transaction materials, and due diligence related to M&A engagements.
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