M&A business advisors guide businesses through the complicated world of mergers and acquisitions. These advisors work with individuals and provide advice to companies and corporations. Besides, it’s best to speak to an advisor when you plan to consider buying, selling or merging companies.
To be more precise, the work of your M&A business advisors is to help with mergers and acquisitions and guide clients with debt and equity financing. Essentially, these firms act as middlemen in business sale transactions, either for the company initiating the sale or the buyer.
The clients can be either an individual or a group seeking to sell some or all of their private company. Representing the buyer in these transactions can also happen, but it is pretty uncommon. These firms also offer services such as:
- Advising on stock issuance and placement
- Underwriting the issuance of securities
- Investment advisory services for individuals
The M&A advisors typically base their fees on a percentage of the sale transaction. The cost varies from the type of company and its value. However, some of them charge a flat retainer fee to secure their services.
M&A Advisory Firms vs Investment Banks
Investment banks and M&A advisory firms can perform many similar duties when it comes to a buy/sell transaction involving a company business. An investment bank generally caters to clients with annual revenue of $250 million or more, while the M&A advisors may set the minimum revenue threshold much lower. Therefore, these firms are attractive for most businesses.
The overall process is mostly the same and guides clients through the sale process. The overall goal is to develop a competitive buying environment and ensure that the selling company gets the best deal.
M&A Advisor Regulation
M&A advisors are subject to federal regulation. In 2016, the U.S. Securities and Exchange Commission approved a set of relaxed Financial Industry Regulatory Authority (FINRA) rules governing M&A firms and their activities. However, these agencies are not required to be licensed as broker-dealers
If you are considering working with an M&A firm, it is essential to understand the regulatory requirements and what the firm or the advisor offers you. Besides, it is highly recommended to look for a firm with a strong track record, experience selling within the industry, and technological capabilities.
Finding The Right Advisor
If you plan to hire an advisor on retirement planning or saving for college, it is best you seek help from a professional. Some advisors specialize in helping clients who are business owners.
Talk to each advisor to decide who you may want to work with. There are fee-based, and there are fee-only. It would be best if you found out how they communicate about their investment ideas.
Performing due diligence ensures that the advisors you choose are the right ones to help you navigate financial planning for now and the long term. When you have experts, you don’t have to worry about anything.