M&A is finally pulling itself out of the proverbial dark ages. The middle-market CEOs of today benefit from greater transparency, and therefore more insight into relationships and other deal-related information than ever before. Investors and buyers who wish to succeed take a proactive stance, connecting with CEOs to analyze opportunities. CEOs can now meet capital providers at key industry events, while an array of online platforms offer information on industry trends and analytics.
What’s the role of an M&A advisor in today’s climate?
Advisors of the past primarily offered access to relationships with CEOs and information about businesses. That has changed. Today’s middle market M&A advisors prove their worth by charging for very scarce resources: experience and time.
Time, unlike money, is a finite resource. Once it’s gone, it’s gone. Spend an hour on one project, and you’ll never get the time—or the money you lost with it—back. CEOs have the greatest impact when they optimize company value. They can’t do that when they’re distracted by the complex and nuanced details of a transaction. When CEOs lose time, their companies lose value—and so too do transactions.
M&A advisors help fill in this gap. By overseeing a deal, the right advisor frees a busy CEO to do what he or she does best. M&A advisors give CEOs the impossible: more time.
Experience can’t be fast-tracked, stolen, or bartered for. It’s earned with lots of time, lots of stress, and perhaps a few losses. By hiring an M&A advisor, savvy executives immediately add more experience to their deal preparation team. CEOs need a seasoned advisor as they market the business, recruit potential advisors, negotiate terms, manage the process of due diligence, and finally, at long last, close the deal.
The other side will almost certainly have a skilled team on their side, including a venerable army of advisors. You wouldn’t represent yourself in legal proceedings, or perform surgery on yourself. Don’t try to manage a deal on your own, or you’ll place yourself at a serious—and potentially catastrophic—disadvantage.
Good advisors identify specific issues, and address them. A good advisor offers much more than just general information or relationships. He or she helps you navigate the process, adding value to the transaction and reducing stress and financial loss.
Good advisors focus on offering something no one else can—past experience, and the time to get deals done right, without a loss to the business.