The Value of Using an M&A Advisor when Selling a Business
June 27, 2023 · 3 mins
Selling a small to medium-sized private company can be a complex and time-consuming process. For many business owners, the sale of their company is likely the most significant financial transaction of their life, and getting it right is crucial. Below we will discuss the value of using an M&A advisor when selling a small to medium-sized private company.
- Expertise and Experience – One of the primary benefits of using an M&A advisor is their expertise and experience. M&A advisors specialize in the sale of businesses, and they have a deep understanding of the market and the process involved in selling a company. They can provide guidance and support throughout the entire process, from preparing the company for sale to negotiating the deal and closing the transaction. The team at Confederation M&A has closed over 100 deals across many industries in the last 10 years.
- Confidentiality – Selling a business can be a sensitive matter, and maintaining confidentiality is essential. An M&A advisor can help ensure that the sale process is kept confidential through the use of non-disclosure agreements, a secure virtual data room, and by only approaching qualified buyers with information about the company for sale. Working with an M&A advisor will help protect the company’s reputation and prevent employees, customers, and suppliers from becoming aware of the sale until the deal is complete.
- Access to Buyers – One of the most significant challenges in selling a business is finding the right buyer. M&A advisors have an extensive network of contacts and can access a pool of potential buyers that business owners may not be able to reach on their own. This can help ensure that the company is marketed to a broad audience, increasing the likelihood of finding the right buyer. Confederation M&A maintains a buyer database with thousands of prospective buyers, including individual buyers, financial buyers, and strategic buyers.
- Valuation Expertise – M&A advisors have a deep understanding of the factors that influence the value of a business, and they can help business owners determine a fair market value for their company. This includes a thorough analysis of the company’s financial performance, industry trends, and comparable transactions. An M&A advisor can help business owners set a realistic asking price and negotiate a deal that maximizes the value of their company.
- Deal Structuring and Negotiation – Once a potential buyer has been identified, an M&A advisor can help structure the deal and negotiate the terms of the transaction. This includes developing a letter of intent, negotiating the purchase price and payment terms, and navigating any legal or regulatory issues that may arise during the sale process. An M&A advisor can help ensure that the deal is structured in a way that meets the needs of both the buyer and the seller and that the transaction is completed smoothly and efficiently.
It is never too early to have a discussion with an M&A advisor on selling your business. In fact, at least three years from the sale is ideal to be sure you are maximizing salability and your after-tax proceeds. From an advisor’s expertise and experience to access to buyers and valuation knowledge, an M&A advisor can help business owners navigate the complexities of the sale process and achieve a successful outcome
Peter MacSwain
peter.macswain@confederationgroup.ca
