Business owners tend to be independent-minded people who believe that anything worth doing is worth doing right—and on your own. You can do your own acquisition, but an experienced third-party advisor offers many advantages. Companies with corporate divisions that are equipped to handle the M&A process may be able to survive and even thrive without an M&A expert. For everyone else, expert insight is critical to the success of a sale. Here are four reasons to consider leaning on the expertise of a third-party M&A advisor.
Augment and Expand Internal Resources
Middle Market companies and first-time buyers typically don’t have a corporate development team. That means that the people charged with overseeing the acquisition are also busy doing their daily jobs. Acquiring another company is a major undertaking demanding time and attention. This makes it difficult for employees to split their time. A third-party advisor expands upon your internal resources, allowing you to remain focused on the daily demands of running your business.
Protecting the Buyer-Seller Relationship
For many owners, the business is a lot like their child. Selling is emotional and taxing. An experienced advisor works to understand the owner’s feelings about the sale, ease their concerns, answer questions, and act as a negotiation buffer. This can preserve the all-important relationship between the seller and the buyer. The advisor cushions bad news, removes emotions from the process, and prevents hurt feelings from getting in the way of running the business. Acquiring a company is not like buying a car. It’s a complex process that demands a lot of work. Your advisor prevents the work from exhausting you both, and stays with you to see the entire process through to completion.
When embarking on the M&A journey, you don’t know what you don’t know. That makes learning difficult, if not impossible. The M&A process includes many steps and challenges, from contacting your initial target without undermining confidentiality to managing the pitfalls of negotiations and due diligence. An advisor guides you through the process, preventing costly mistakes by asking the right questions. In so doing, they can help you reach closing faster and even support you to achieve more favorable deal terms.
Evaluate the Deal
At first blush, a deal might not sound like much—especially if you’re solely focused on price, to the expense of everything else. But a professional helps you see the deal for what it is, evaluating terms and assessing price. If an issue arises, your advisor can help you devise strategies for managing it. And if the deal falls apart, you’ll know why, and know that you did all yo could to protect the deal.
For owners who are accountable to shareholders, advisors can prove particularly important. They ensure you protect shareholder interests and the company, without being led by your emotions, by inflated valuation expectations, or by false promises by the buyer. The right advisor transforms the deal from a frustrating process into a streamlined, professional operation.