As you contemplate buying or selling a company, you may want to consider the benefits of working with a merger and acquisition advisor. A M&A consultant can bring significant value to the table. They can help you prepare for a sale or acquisition and manage the buy-side or sell-side M&A process. In addition, they keep all the communication on track throughout the purchase or sale. The following are just a few ways they can assist and advise you.
Looking to work with a mergers and acquisitions advisor for your company sale or purchase? Contact us today at Clare Advisors.
Prepare for the Purchase or Sale
The best way to approach a purchase or sale is to start with adequate preparation. A mergers and acquisitions advisor can help you get your business ready for a merger or acquisition. With their help, you have a higher likelihood of a smoother transaction as you move forward.
Advise Buyers and Sellers on Improvements
Whether you are a buyer or seller, you may want to make improvements to your agency before going out into the market. A merger and acquisition advisor can help you identify areas to work on prior to the sale or acquisition process.
When a seller works with M&A advisory firms, their advisor finds out when the seller wants to go forward with the sale process. While some sellers may want to sell within a year, others may want to sell their agency in a few years. For those that wish to sell in a few years, the M&A advisor can work with the seller to improve their company before they begin the sell-side process. Here are some of the areas where a merger and acquisition advisor can help a seller improve:
- Revenue Growth
- Revenue Concentration
- Competitive Positioning
Buyers also benefit from the value provided through M&A advisory services. You and your buy-side advisory professional can discuss the following important topics:
- Building a Team
- Talking to a Bank about Financing
- Determining How Much Cash You Want to Invest
- Connecting with People Who Have Bought an Agency Before
- Preparing for Pre- and Post-Closing Integration
- Addressing Cultural Differences
Valuation Analysis and Market Insight
Whether you are the buyer or the seller, you may want to know the value of the company in question. Yet, these valuations can be difficult to determine. The good news is that your M&A advisor can provide valuation analysis if necessary. During a sell-side transaction, they can discuss market transaction multiples so that the sellers know how an offer from a buyer might compare to prior similar M&A transactions.
Advise on Process Options
There are different types of buy-side and sell-side processes. Buy-side and sell-side processes tend to vary depending on the needs and preferences of the buyer and seller. However, deciding which type of process is right for you does not have to be a complex issue. M&A advisory firms can describe each of the processes and discuss the advantages and disadvantages of each. Depending on which process characteristics would best apply to you and what you are looking for in a transaction, they can advise you on how to choose the idea process for you.
Find Strategic Buyers or Sellers
Finding the right buyers or sellers can be a challenge. You are occupied with your own business, and you likely do not know a significant amount of agency owners who are looking to buy or sell, let alone willing to reveal that they are in the market. An advisor can help you connect with other people ready to begin an M&A transaction.
An M&A advisor should have experience with their client’s industry when they provide advisory services in sell-side processes. With their industry experience and the relationships they have developed with companies that actively acquire, they can help create competition among bidders.
An M&A advisor should be able to comfortably reach out to a wide range of buyers or sellers based on their buyer relationships and any outreach process they may have.
In many cases, you don’t already know who your buyer or seller is when you hire an M&A firm to run a process for you. Your advisor is likely to have an outreach process they can implement to look for potential buyers or sellers.
Narrow Down or Expand Search
Based on what you are looking for and the resources your advisor has on hand, they should be able to narrow down or expand a search process based on an agency’s size, location, and services / capabilities. For example, if you are looking to acquire an advertising agency and you don’t care where it is located or what size it is, the outreach process will be very expansive. On the other hand, if you are definitive about the location and other agency parameters, the search will be narrower.
Manage the Transaction Process
The M&A transaction process is something that many agency owners have not gone through before or do often. Given owner’s lack of M&A experience and the responsibilities they still have to manage during a transaction, it is beneficial to be able to rely on an expert to manage the transaction.
To help the buyer or seller continue to run their agency profitably and perform well, the advisor handles most of the communications between the buyer and seller throughout the transaction.
Manage Information Flow and Negotiations
Regardless of whether you are selling or buying, you want to have someone on your team that ensures communication is happening when it should. An M&A advisor can manage the information flow for you. They can also negotiate on your so that your parameters are tactfully and thoughtfully communicated to the other party.
Moving Communication Forward
Communication should keep moving forward throughout the transaction. Otherwise, the process may stall or go awry. However, an M&A consultant has experience and skill in keeping communications on track from the beginning of the sale process to the end. They can manage the phone calls and emails to coordinate conversations between parties.
Communicating with the Other Party
Both parties will need to sort out many details and come to agreements throughout a transaction. While the M&A advisors and the seller and buyer can have high-level conversations regarding major points, sometimes it is just the lawyers that need to hash out certain points in the contracts. A merger and acquisition advisor can prove extremely valuable in helping you communicate your goals with the other party. They can arrange for meetings and calls with the other side as well as pushing both parties to stay on track.
Act as a Buffer Between Parties
M&A transactions can be emotional or even contentious in some cases. Each party has its own position and naturally wants the best outcome for itself. If you as an owner have never negotiated the value of your agency or have never negotiated how much working capital you keep, the process may be a bit overwhelming. As you might imagine, the process will go smoother if there is someone to provide a buffer zone between the selling and buying parties. The merger and acquisition consultant can be the buffer that handles the points that both parties may feel strongly about.
- Diffuse Potential Issues – When disagreements arise between the parties, the advisor can smooth them out.
- Unemotional Negotiations – With a skillful negotiator on your side, negotiations are more likely to be based on logic and strategy rather than emotions.
- Help the Buyer and Seller Build Trust for Future Work – The buyer and seller will be working with each other following the transaction. Therefore, it helps to have an advisor who can help the buyer and seller develop trust.
Provide Industry Experience
Merger and acquisition advisors typically have extensive experience within the M&A field in general. However, if your M&A advisor also has experience in your industry, their experience significantly benefits you. They advise you on what to expect during a typical marketing and advertising industry transaction.
Seller’s Market vs. Buyer’s Market
Your advisor can tell you if it is a seller’s market or a buyer’s market. Depending on current and predicted interest rates and / or tax changes, they can give you a general idea of whether it is an ideal environment to sell or buy an agency.
Insight into What Deal Point to Negotiate
A buyer or seller usually has a general idea of what they expect to receive, what their demands will be, and what their preferences are. Yet, it is rare to get everything you want in an M&A transaction. Most times, the process involves a certain amount of give-and-take, which happens through negotiations.
If you are selling your business to a buyer your M&A advisor has worked with before, they will already have past transactional experiences that can be useful to both parties. Your advisor can tell you which points the buyer may or may not be willing to budge on and save both parties time and money.
Level the Field for First-Time Buyers or Sellers
A first-time buyer or seller can be at a disadvantage when they enter an M&A transaction with someone who has gone through the process before or has done so often. A merger and acquisition advisor can level the playing field and remove that disadvantage.
Clare Advisors is among the top M&A firms in its niche of digital advertising, marketing, media, and business service industries. With over 20 buy-side and sell-side transactions to their credit, the Clare Advisors team offers responsive and customized services for you as you either prepare for a sale or acquisition, or begin a sell-side or buy-side process.
Would you like to work with the best M&A advisor for you? If so, reach out to Clare Advisors to start now.