M&A Advisors Add Value for 100% of Sellers, CEO Study Finds
![M&A Advisors Add Value for 100% of Sellers, CEO Study Finds](/perch/resources/39-w320h240.jpg)
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)."