The Role of a Mergers & Acquisitions Company
People choose to buy a business for different reasons. Among the most common of these is to escape the restrictions of working for a boss and retain a larger share of the fruits of their labour. Such individuals will often continue to operate their corner cafes or hair salons until the day they retire. Their primary goal is to maintain an adequate income and provide a legacy for subsequent generations when they retire. They will not require the services of a mergers & acquisitions (M&A) specialist.
For others, purchasing a business may merely be a means to boost their retirement income. They see their bottle store or laundromat as a negotiable asset. When the time is right to quit working, they aim to sell it to the highest bidder and start enjoying the sunshine, surf, spicy seafood dishes and rum punch on some Caribbean island paradise. However, even though they may be making money, not everyone can maintain the challenge of running a business indefinitely. Ultimately, some may just be relieved to transfer the reins. The role of a mergers & acquisitions advisor is to establish their client’s actual goals and help them to explore all the alternative options before deciding on their next move.
In practice, selling small businesses such as those mentioned above is not a particularly specialised task. Any estate agency with a commercial division or an independent business broker can generally handle it. Nevertheless, even the owners of larger companies with a multimillion annual turnover are motivated to sell for similar reasons. For this market segment, the services of a dedicated mergers & acquisitions company can prove invaluable. Its role will not merely be to oversee a financial transaction but also to actively market the business and negotiate the terms of the sale. One of the firm’s sell-side advisors will focus exclusively on finding the most appropriate acquirer and procuring the best possible outcome for the seller throughout the negotiations. The seller is the sole client, and it’s a wholly client-centric process.
The seller’s motivation will be a critical factor in determining the role of a mergers & acquisitions advisor. While some clients’ sole aim may be to liquidate their assets, others will often have an alternative goal in mind. Having built a successful business, they might want to relinquish the management responsibilities while retaining a share of its profits. In other owners, it could be that budgetary constraints are hampering the need to grow their business. In each case, partnering with a suitable buyer could provide the desired solution.
Whether divesting or looking for a way to expand, the marketing, legal and financial processes will be best left to an experienced mergers & acquisitions firm. The sell-side advisor will micromanage each step of the process, from preparing the relevant documentation through engagement with suitable prospects to the sales negotiation, before concluding a favourable deal. That said, some M&A firms have proved to be more successful than others.
Deal Leaders International has worked with more than a hundred business owners in just four years and concluded deals worth over R1 billion in the last six months alone. Its innovative yet exceptionally effective strategies for negotiating mergers & acquisitions are your guarantee of the best possible outcome for your sale.