July 8, 2015 HMA Website

Why to Use an M&A Intermediary: Part 2

Consider the following:

  • Confidentiality — Whether you’re looking to buy or sell, once you put the process into motion it signals to the world that your business is in play. Your employees, customers, competitors and suppliers may take damaging steps to protect themselves from a perceived threat. An M&A consultant will protect the identity of both you and your company by making contact on your behalf, describing your company only in general terms. Prospects are required to sign a nondisclosure agreement before your company’s name is even disclosed.
  • Expertise — Unless you’ve been through the M&A process many times, you can’t have the wisdom that comes with experience. A seasoned M&A intermediary will level the playing field for you.
  • Business Continuity — Buying or selling a business is a very time-consuming process for owners who are already wearing many hats. Taking on the many additional tasks required can get in the way of necessary business functions, risking damage to your reputation and/or profitability. By hiring an intermediary, you can keep your focus on running your business while the professionals take care of the details.
  • Maximizing Prospective Partners — Being in this business on a daily basis allows M&A intermediaries to develop and maintain strong networks. This gives us the tools and resources to discretely reach the largest possible base of buyers or sellers, including both domestic and international sources.
  • Winnowing Candidates — Once appropriate candidates are identified, professional M&A intermediaries screen them to ensure that they are viable and serious. An intermediary who is experienced in your channel can reach buyers and sellers through a variety of avenues that are not available to you. We not only screen and qualify parties but also negotiate with them on your behalf.
  • Marketing — A professional M&A intermediary has the experience to present your offering in its best light to maximize your objective. We know from experience the key values sought by targeted prospects, how to position your attributes and assets and minimize your liabilities and shortcomings.
  • Valuation — Putting a value on a sell or buy opportunity can be difficult and complex…and absolutely critical to a successful transaction. Your intermediary has access to business transaction databases that can be used as guidelines or reference points, and will help you determine all the factors that should be considered. We invest the time to learn your business proposition and develop pro-formas or recast financials as the case may be.
  • Maintaining the Buyer/Seller Relationship — Given the high stakes, the sale of a business can become personal and contentious. Since buyers often want a holdback contingent on the performance of the company post-closing, it may also be critical for parties to work together after a deal is reached. An intermediary acts as a buffer, improving the likelihood of success, and minimizing confrontations that can occur when buyers and sellers represent themselves.
  • Financing — In today’s climate, you need an M&A intermediary who has relationships with banks and private lenders that understand the automotive and commercial vehicle aftermarket arena. In addition, an experienced M&A team is familiar with the ins and outs of SBA and other Federal and State programs that are available.
  • Closing the Deal as Quickly as Possible — Since the sole function of the M&A intermediary is to complete the transaction, engaging one significantly improves the likelihood that your deal will be closed quickly. The faster the sale is completed, the lower the risk of employee problems, customer defection and predatory competition.

We hope these points give you an idea how much benefit an M&A Intermediary can bring to buying or selling a business. Feel free to call and speak with one of our founders to find out more about how we can support you with a successful M&A transaction.