Top Questions to Ask Before Hiring a Mergers and Acquisitions Specialist

December 19, 2023

In the fast-paced world of mergers and acquisitions (M&A), finding the perfect partner to help sell your business can be a daunting task. The first step is to figure out whether you need a mergers and acquisitions specialist or a business broker. Read ‘Business Broker vs. Mergers and Acquisitions Specialist: Which One Do You Need?’ to answer this critical question.

If you tick all the boxes for an M&A specialist, this article explores why it’s crucial to hire the right M&A advisor to navigate the complex landscape of mergers and acquisitions transactions.

Understanding Mergers and Acquisitions

In simple terms, mergers and acquisitions refers to the consolidation of two or more companies to form a new entity or the purchase of one company by another.

Mergers occur when two companies of relatively equal size join forces to create a new entity, typically with the goal of achieving synergies and enhancing market competitiveness. On the other hand, acquisitions involve one company (or an individual buyer/investor) acquiring another, often to expand market presence or gain access to new products, technologies, or customer bases.

M&A transactions can take various forms, including asset acquisitions, stock purchases, mergers of equals, and leveraged buyouts. Each type of transaction has its own set of considerations and complexities, requiring specialized knowledge and expertise to navigate effectively.

Why Hire a Mergers and Acquisitions Specialist

Mergers and acquisitions are complex transactions that require careful planning, analysis, and execution. Hiring an experienced mergers and acquisitions specialist is essential to ensure a smooth and successful process (read ‘How M&A Specialists Can Make or Break The Sale Of Your Business’ for more). M&A advisors are professionals that bring a wealth of knowledge and expertise to the table, helping you to navigate the many complex challenges that come with mergers and acquisitions deals.

A mergers and acquisitions specialist acts as your guide throughout the entire process, from identifying potential buyer targets to negotiating exit deals and/or integrating your newly acquired company into the buyer’s existing operations. M&A specialists possess a deep understanding of the legal, financial, and strategic aspects of mergers and acquisitions transactions, making these experts invaluable assets when the time comes to sell your business.

Importantly, by hiring an M&A specialist, you gain access to their extensive network of contacts, which can be instrumental in identifying suitable acquisition targets or potential buyers for your business.

Additionally, an experienced M&A specialist will provide objective advice and analysis, helping you make informed decisions that align with your business objectives.

Questions to Ask a Potential M&A Advisor

Now that you understand the importance of hiring a mergers and acquisitions specialist and the critical role they play in M&A transactions, let’s explore the top questions you should ask when interviewing prospective M&A advisors:

Experience and Track Record

1. Can you provide examples of successful M&A transactions you have facilitated in the past?
2. What industries have you worked with, and do you have specific expertise in our industry?
3. How long have you been working as a mergers and acquisitions specialist, and what is your track record of success?

Industry Knowledge and Expertise

1. How do you stay up-to-date with industry trends and developments that may impact M&A transactions?
2. Which insights can you provide into current market conditions and potential opportunities or challenges in our industry?
3. What size companies in terms of revenue and EBITDA do you work with? Is the ownership group running the company, or are they passive investors?

Communication and Collaboration

1. What is your communication style, and how often can we expect updates throughout the M&A process?
2. How do you collaborate with other professionals involved in the transaction, such as lawyers, accountants, tax practitioners and wealth advisors?
3. How many references can you provide from closed deals over the past 3 years who can speak to your communication and collaboration skills?

Confidentiality and Ethical Considerations

1. How do you ensure the confidentiality of sensitive information throughout the M&A process?
2. What measures do you have in place to mitigate conflicts of interest?
3. Are you a member of any professional organizations or associations that uphold ethical standards in the field of mergers and acquisitions?

Costs, Deliver and Timeline

1. What are your fees and how are they structured?
2. What do you deliver for the fees charged, from initial valuation to marketing, all the way to closing the deal?
3. Can you provide an estimated timeline for the entire M&A process, from initial planning to closing the deal?
4. Are there any additional costs or expenses we should be aware of?

You’re Still the Boss

Any M&A specialist worth their salt will have no trouble answering these and any other questions you may have.

Remember: you, as the business owner selling the company you’ve probably dedicated most of your working life to establish, are in the driver’s seat. You have every right to ask these questions (and more!), and you deserve thorough, verifiable answers. If you don’t get this from a prospective M&A advisor you approach, perhaps you should keep shopping around…

Ask Woodbridge

You’re welcome to ask Woodbridge International any of the above questions, and more. With 30 years selling mid-sized businesses in the US & Canada under our belt, Woodbridge International is able to provide experience-based and verifiable answers to all your questions. Book your obligation-free appointment now.