The Value of a Mergers & Acquisitions Advisory Firm

There are a lot of factors to consider before making the big decision of selling a business in the built environment which is why many sellers decide to consult a mergers and acquisitions advisory firm.

Selling your business is something you’ll probably do only once. There’s no opportunity to take a trial run or build up any experience before you do the real thing. Selling can be a time- consuming and often frustrating process.

Many business owners have thought about or have even tried selling their business, on their own, to no avail. They recognize the need for help but are unsure of where to seek help or who to talk to, to support them in the process of selling their business. There are many tales of a business owner who sold their business for far less than they should have or tried selling their business and encountered obstacle after obstacle, and pitfall after pitfall. These owners often realize, after the fact, that working with an advisory firm could have made the selling process much more efficient and successful.

Given that set of facts here are benefits to working with a mergers & acquisitions advisory firm like Stonemill Partners, what we do for business sellers and how it benefits you in selling your business:

Experience and Expertise

Some transactions can be complex. Working with an advisory firm will help you understand the structure of an offer and all the moving parts all related to your objectives and expectations. This includes analyzing offers and negotiating counter- offers.
If you decide to do it on your own you will potentially be going into a complicated situation without the adequate tools, knowledge and expertise that an experienced M&A advisor would have.
An advisory firm has the experience of working through many similar transactions that can help with your situation.
With active strategic buyers, the difference in knowledge of the acquisition process can be vast. An advisory firm provides a level playing field between novice sellers and experienced buyers.
Selling your business is not a job you should attempt to do alone. There are many extremely important contract items to negotiate and pitfalls to avoid. A hand’s on advisory firm will help you navigate this.

Business Stability and Performance

A good advisor will reduce the time and attention necessary from a business owner to complete the sale. The process of selling can take many months. Most business owners don’t have the time, expertise or tools to manage each step of the selling process without diverting needed attention from current business operations.
Getting involved in the selling process on your own and not working with an advisory firm may result in lower revenue and profits, lower business activity and lower efficiencies in your business which may ultimately affect your businesses value and how much you’d get when selling it.
The more involved you are in the sale, the less time you’ll have to spend actually running your business. When you are selling is the time when you need your business to perform most successfully. Leave the selling process to experts who’ve been involved in many deals, instead of spending time trying to reinvent the wheel.

Focus on Your Industry

When considering an advisory firm, make sure you choose one that is focused on representing sellers in the built environment. Don’t get swayed by firms that emphasize consulting, seminars, headhunting and other non-representation issues. Pick a firm that will get the job done according to your objectives; finding a seller for your business.

Confidentiality

An experienced advisor can limit the risk of confidential information being disclosed, while protecting the identity of your company until the proper non-disclosure agreements are signed with prospective buyers.

Reaching Potential/Prospective Buyers

Make sure the M&A firm you’re working with actually knows buyers in the built environment who would be interested in your business and has a process for approaching these prospective buyers.
An experienced M&A advisor with a strong network in the built environment can market your company to a larger group of potential buyers that you can’t access on your own.
An advisory firm’s extensive network of business and professional contacts, databases and research capabilities, along with proprietary methodologies enable them to provide targeted introductions of appropriate and strategic buyers.

Marketing the Business

A mergers & acquisitions advisory firm will prepare a Confidential Information Memorandum (CIM) describing your business in the best light to attract prospective buyers, get them to the next step of the process while moving towards
a sale.
A mergers & acquisitions advisory firm has an understanding of the key values and benefits that buyers are looking for and can assist in identifying factors that can lead to a better selling price.

Your Business Value

Valuing a business in the built environment is way different than valuing a house. Every business is different, with many, many variables impacting value. Advisory firms have access to industry information, comps and other information that enters into the valuation process. This allows the proper expectations to be set for the selling owner as well as establishing information for negotiating offers.
This includes providing an objective, professional opinion of realistic anticipated business value for you, the seller.

Closing a Deal – Reaching the Finish Line

Advisory firms will have experience with the due diligence and legal documentation process. During due diligence buyers can examine anything and everything about your business. This can be time-consuming and complex for business owners to undertake themselves.
An experienced advisory firm can help to create a successful transaction structure leading to an efficient and timely closing.
Advisory firms usually get paid when the sale is complete. This means both you and the advisory firm will have the same end goal in mind.