M&A Consulting Firms
The term M&A Consulting Firms is used in many industries but who are M&A Consulting Firms? Merger and Acquisition services, frequently also called a business intermediary services, m&a consultants, business intermediary or business transfer agent, is an individual who acts as a cushion between someone selling a business and the individual buying that business. Most frequently, m&a consulting firms are used to conduct all aspects and stages of a business sale, but business m&a firms can sometimes be utilized to assist with just a few select steps when an owner is selling a business. These stages would include: preparing a business for sale before it goes to market, conducting a valuation on the business and establishing a sales price, marketing and advertising the business for sale, screening interested buyers, facilitating the due diligence process, negotiating the sale, and closing the deal which includes preparing all the necessary closing documents. It is customary for business m&a firms to charge between five to ten percent of the final purchase price in commission.
So how do you know you are working with a qualified professional? American Fortune Business Sale Consultants recommends that owners look for mergers and acquisitions consultant with:
- An MBA degree or equivalent; and or at education and experience with business accounting and finance
- Experience. Ask for a list of references and follow-up with them
- Integrity. Is this someone I would trust with my family and my retirement plans?
- Credentials. Certified Business Intermediary
American Fortune Business Sale Consultants, is a m&a consulting firm for business owners seeking to sell their business at a highest possible market price. American Fortune Business Sale Consultants offers m&a consulting services to clients with with yearly revenues up to $50 million.
The Business Sale (M&A) Process
The role of a good M&A Consulting Firm is to bring substantial expertise, experience and valuable know how to bring about a very good deal for the seller. Finding buyers is often the easiest part of selling a business. The ability to bring about creative solutions, problem solving, effective negotiation, creative thinking, deal structuring and closing the sale is often a complicated process and requires a m&a firm with exceptional skills and experience. The m&a firm’s ability to value a business professionally is equally important. A buyer and their advisors will carefully review the value of a business, they will also scrutinize the business via a thorough due diligence. Full service m&a firm’s will also assist with bank or other form financing for the buyer. Other value added services provided by superior m&a firm’s include solving problems related to employees, customers and suppliers for business being sold.
The process of facilitating a sale of a business involves many activities and including problem solving and creative thinking. When a m&a firm begins working with an identify buyer, it is just a beginning of a complex journey of arriving at a successful sale of a business. Once the buyer has had a chance to perform preliminary due diligence and has continued interest in purchasing the business the next step it the issuance of a Offer to Purchase or Letter of Intent in which the buyer and seller agree to move toward a deal. Part of the terms of the Offer to Purchase agreement or Letter of Intent is to set a target date for completion of the transaction. The Offer to Purchase Agreement Letter of Intent also serves as a framework around which to structure the deal and negotiations. The Offer to Purchase Agreement or Letter of Intent also helps reduce ambiguity and misunderstanding, and ensures that both parties are serious about pursuing the transaction. Additionally, establishing a deadline for a closing helps to keep the buyer and seller focused on the main issues, rather than on lesser issues that can prolong the deal for many months or even kill the deal.
Once the Offer to Purchase Agreement or Letter of Intent is in place the m&a firm’s next task is to facilitate the negotiations on other issues. Negotiations on some of these other issues may result in price adjustment of the price set forth in the Offer to Purchase Agreement or Letter of Intent. A variety of considerations have to be taken into account at this stage, including value of inventory, customer issues, training, seller financing, value of accounts receivables, employee issues, value of goodwill, inclusion or exclusion of equipment in final purchase price, tax issues impacting each party, etc. As the closing is in sight there are always some obstacles to a sale that may come up is “Buyer backing out.” Buyer’s change of mind typically occurs during the latter stages of the deal, sometimes the buyer may suddenly realize that that they are overpaying for the business, or they are not sure, or they are looking at another opportunity. Buyer’s change of heart can kill the deal if the m&a consulting firm and the seller failed to address all the issues very well including emotional issues prior to dealing with the buyer or at least very early in the deal.
Once the key elements for an agreement have been reached, the deal process moves to the main due diligence stage. In this stage the buyer and their consultants perform numerous reviews and checks on the business and its financials. Towards the end of the due diligence stage various legal technicalities also arise which could derail the deal. For example, the buyer may insist on very strict non-compete which may in turn inhibit the sellers plan to start a new business. It is the m&a firm’s role to prepare for and facilitate the due diligence performed by the buyer and their advisers. The m&a firm’s role is to protects their client, preserve the deal as well as to problem solve and provide creative win-win solutions.
In the final stage, the exceptional m&a firms can be utilized to help the buyer, seller to gather details for the final drafting of the sale contract. This stage entails the use of attorneys on both sides to formalize the agreements for the sale. One of the best ways for m&a firms to reduce the chance that the deal will fall apart at this critical juncture is to try to address all questions and concerns in the Offer to Purchase and or Letter of Intent and due diligence stages. Although a m&a firm may have superior skills in handling a deal, the buyer and their advisors may utilize certain tactics that may threaten the entire deal, such as an outright price reduction or demanding that some new contingency be added to the agreement. At this stage, the m&a firm’s expertise as a negotiator, mediator and problem solver are key to ensure that the deal goes through.
American Fortune Business Sale has provided m&a consulting services in the following areas of the continental USA: Columbus Ohio, Atlanta Georgia, Lexington Kentucky, Bowling Green Kentucky, Nashville Tennessee, Memphis Tennessee, Cincinnati Ohio, Dayton Ohio, Toledo Ohio, Los Angeles, Cleveland Ohio, Pittsburgh Pennsylvania, Baltimore, Maryland, Indianapolis Indiana, Chicago Illinois, Detroit Michigan, Flint Michigan, Tampa Florida, St. Louis Missouri, Kansas City Kansas, Des Moines Iowa, Minneapolis Minnesota, Louisville Kentucky, Oklahoma City, Oklahoma, Dallas Texas, Fort Worth Texas, Denver Colorado, San Francisco California, Salt Lake City Utah, Phoenix Arizona, Lexington Kentucky, Los Angeles California, San Diego California.