Business owners are frequently approached by trade buyers looking to expand their groups and many owners try and negotiate deals without using a corporate finance advisor. The trade buyer has probably bought many businesses before and they know they know all the tricks in the book whilst the owner manager is probably selling their business for the first time. Well that’s the time to pick the phone up to a corporate finance advisor, someone who does M&A for a living. Trust me it pays to have a corporate finance advisor in your corner.
Private equity houses buy and sell businesses for a living, yet they always use the service of an experienced corporate finance advisor. Here’s why:-
- There is potential that the advisor may be able to increase the price by introducing other potential buyers and create some competitive tension.
- Selling a business is very time consuming – the owner needs to concentrate on running their business.
- Providing the right information in the right way (“the spin”) is key to a successful sale.
- Corporate finance advisors are skilled negotiators – they know when to push and when to pull.
- Corporate finance advisors can play the hardmen when the going gets tough, allowing principals to remain on good terms.
- Appointing a corporate finance advisor enhances the professionalism. It keeps the buyers on their toes and the project on time.
- Corporate financiers see deal breakers coming and have the experience on how to deal with them.
- Corporate financiers are cost effective – they are success led and will charge the majority of their fee on completion of the project.