Deciding on a Merger and Acquisition Advisor

An informed advisor should be able to speak intelligently about the industry, industry segments and business models, appraisal methods, kinds of capital and buyers sources, and the procedure of the service that you are hiring them for. Spend some time to hear them and get questions to gain insight into their expertise and knowledge. They should be able to articulate what they know and how they will serve you to add value to the engagement, as a potential advisor to you. Just as you should do your due diligence on them, a credible advisor will do the same on you and your company before entering into a relationship and you should be suspicious of any that will not.

M&A advisors comes from all sorts of professional backgrounds; accountants, entrepreneurs, sales, attorneys, banking and a multitude of other disciplines. Those credentials alone are insufficient though. To be effective, an M&A advisor should be skilled in accounting principles, contract sales, law, negotiations and marketing business valuation and finance. In relation to knowledge of mergers and acquisitions, there are simply a few professional associations that offer education in the United States. The International Business Broker's Association© and Merger & Acquisition Source© will be the most reputable organizations and offer the Certified Business Intermediary (CBI) and Merger & Acquisition Master Intermediary (M&AMI) certifications which require significant course work and demonstrated transaction experience. In terms of expertise in business valuations and appraisals, you will find three main organizations offering education in the states. The American Society of Appraisers©, the National Association of Certified Valuation Analysts© and also the Institute of Business Appraisers© are definitely the most reputable offer and organizations the Accredited Senior Appraiser (ASA), Certified Valuation Analyst (CVA) and Certified Business Appraiser (CBA) certifications which also require significant course work and demonstrated engagement experience. In many cases, an M&A advisor will have to be licensed in both property or securities brokerage to barter the sale of any business and acquire paid a contingent fee. While not many business sale transactions are done as stock purchases, a securities transaction, say for example a stock sale, that is certainly negotiated by an unlicensed broker may potentially be later over turned from a court which could have significant financial ramifications for yourself.

If they do not have good processes in place, whether contracting with the advisor to value your company, sell it or acquire others, the advisor will not be very effective. The processes, objectives and strategies ought to be explained for you at the beginning. An advisor that lacks a properly-planned strategy is like a general sending troups to war with out a battle plan and the result is definitely the same - wasted resources and failed execution. Clearly defined processes can also be an indication of experience and capability.

As in any relationship, the character in the individual(s) that you will be working with should be of high importance. If the advisor is going to be representing you, then it is advisable to make certain that they may be someone that you like personally, will represent you in the professional manner, will continue to work hard and set your interests above their particular, and it has the personality to manage and mediate multiple parties effectively.

Make sure that you weigh each of these factors into your consideration and speak to multiple advisors before making a decision, when seeking a professional acquisition and merger advisor. Choosing the wrong advisor can be a painful and costly experience, but choosing the right one can lead to highly fruitful and long-lasting relationship for both parties to the engagement. For more information please visit Leland Sandler

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