The first question many business owners have when they are ready to pursue a transaction involving their company is whether they should engage the help of an intermediary or do it themselves. I am a deal professional, so I am clearly biased toward advising owners that intermediaries are worthwhile investments and can assist in creating value in a transaction.
However, you can go it alone. Many deals are done in the middle market without an intermediary. But, just like you wouldn’t represent yourself in a lawsuit or prepare your company’s taxes, wise owners will want to have help. An experienced M&A advisor can make the process significantly easier to get through and generate significant value.
Simply put, middle market M&A deals are difficult to complete. Many, many factors need to align to get a deal done. Ensuring that you have solid advice on marketing your company for sale and getting a transaction completed is crucial not just to maximizing value, but also to just getting a deal done at all.
In the deal business, I have found that many times, buyers and sellers simply don’t speak the same language. Entrepreneur owners of businesses often run significantly valuable businesses without the sort of infrastructure or institutional experience that strategic and/or financial buyers are used to seeing. Having an M&A advisor in place can be of great assistance in simply speaking the language.
Additionally, getting a transaction completed will take time – a lot of it. Selling a company can take anywhere from six to 12 months, or longer, and will require countless hours of work and discussions with potential acquirers. Most likely, your time is going to be much better spent running and growing your company rather than selling it. The process will be exhausting; and getting distracted from your company’s success is a dangerous risk to take.
Finally, hiring a competent M&A advisor will create leverage for you in marketing your company that you likely can’t create for yourself. There is a reason that private equity firms have large business development groups that work hard to generate proprietary leads. They would much prefer to acquire companies for which they are sole potential purchaser. If you want buyers to compete for your company, you’ll want to retain an advisor to make that happen.
Michael Schwerdtfeger’s eBook “The Inner Workings of a Deal: Tips for a Successful Transaction” is now available for download on his website. Get your free copy here: http://mbsmergers.com/downloads/Share: