M&A Advisors Add Value for 100% of Sellers, CEO Study Finds
As Reported By Axial Networks, Inc.
Fairfield University Dolan School of Business professor Dr. Michael McDonald surveyed 85 business owners who sold their businesses with the help of an M&A professional for between $10 million and $250 million between 2011 and 2016.
One-hundred percent of respondents said that the bankers added value to the process, with 69% saying the value-add was "significant."
For 84% of business owners, their final sale price was equal to or higher than the initial sale price estimated by their M&A advisor.
Business owner saw "managing the M&A process" as the most valuable service the banker provided. This includes a go-to-market plan and executing on that plan, including the development of teasers and CIMs, managing the virtual data room, negotiating key terms and conditions, and managing to a timeline. Business owners also lean on bankers to negotiate the transaction, prepare the company for sale, and add credibility to their profile as a seller.
"Representation definitely got us a better price and more favorable terms," noted one respondent. Another advised, "Unless you have substantial expertise, a broad buyer network, and a lot of free time, partner with an M&A advisors. You may be able to get it done yourself, but you'll be leaving millions of dollars on the table as well a closing a higher risk transaction (when it comes to representations, warranties, and indemnification)."