Alright, let’s talk about something that’s pretty daunting for most business owners – mergers and acquisitions (M&A). It’s like the corporate version of dating, but with a lot more at stake. Just like you wouldn’t jump into a relationship without knowing the person, you shouldn’t jump into an M&A transaction without the right advisory firm by your side. Especially in the UK, where, believe it or not, we were the hottest target for M&A activities in 2022, with deals worth a whopping $249 billion! That’s a 123% increase from 2021, according to the folks at EY.
So, with so many advisory firms popping up, how do you choose the one that’s right for you? Here are some key things to consider:
Expertise and Experience
First things first, you want someone who knows what they’re doing. It’s like when you’re looking for a personal trainer – you wouldn’t hire someone who’s never set foot in a gym, right? Make sure the firm you choose has a track record of successful M&A transactions in your industry. Ask them for case studies or references from past clients to see how they’ve performed in the past. And don’t forget to check if they understand the UK’s regulatory environment and any other regions your business operates in.
Network and Relationships
You know how they say it’s not what you know, but who you know? Well, that applies here too. A good M&A advisory firm should have strong relationships with potential buyers, sellers, and financiers. This network is essential for identifying potential targets, negotiating the best terms, and facilitating a smooth transaction process. And if your transaction involves cross-border elements, make sure the firm has an international reach.
The people working on your transaction are super important. You want a team that has the right mix of skills and experience for your transaction. Take a look at the backgrounds of the senior advisors who will be directly involved in the transaction. Their expertise will be critical in navigating any challenges that may arise.
Fees and Charges
Let’s talk money. Understand the fee structure of the advisory firm. Typically, M&A advisory firms charge a retainer fee, a success fee, or a combination of both. A retainer fee is a fixed amount paid upfront, while a success fee is a percentage of the transaction value paid upon its completion. Make sure the fee structure fits your budget and that there are no hidden charges.
Reputation and References
Lastly, consider the firm’s reputation. Check online reviews, ask for references from past clients, and consult your network for recommendations. A reputable firm will have positive reviews and a list of satisfied clients who can vouch for their services.
Choosing the right M&A advisory firm is super important for the success of your transaction. Consider their expertise and experience, network and relationships, team quality, fees and charges, and reputation before making your decision. Remember, the right partner can make all the difference in ensuring a smooth and successful transaction. Good luck!