Selling or buying a business is a significant undertaking that requires careful consideration, and it is not a venture to be taken lightly. Many leaders encounter a host of challenges, confusion and complications that are commonly associated with Mergers and Acquisitions (M&A) transactions.
While some business owners tackle the process on their own, the complexities and challenges involved in M&As make having an experienced and trusted advisor a highly recommended option, as a fitting advisor brings insights and responsibilities that can help ensure a successful transaction and improve your business’ long-term success.
Let’s look at the qualities that a trusted M&A advisor should bring to the table and how to choose the right one for your organization.
A trusted M&A advisor provides valuable and strategic guidance by continuously evaluating the business landscape and analyzing the factors that impact your sector. As M&A transactions involve a range of legal, financial and strategic considerations, it is important that the M&A advisor you engage be an expert in your specific industry sector. Seasoned advisors specializing in your industry have access to proprietary data and research, which they use to help you make more informed decisions.
You should also choose one that can identify viable acquisitions, assess which strategic fit is best for your business, and execute a negotiation strategy that maximizes value beyond the transaction. This last point is critical. A trusted advisor should always help you make informed decisions that support your long-term business goals—not just the contract currently on the table.
To determine if they possess the necessary skills and knowledge in your specific industry, first look for one who has represented companies within your sector. This shows they have experience with similar deal structures, possess current knowledge of what the competition is doing and know the major trends that are driving your industry forward. Second, confirm that the team assigned to your transaction has successfully closed similar deals within your specific industry niche.
M&A transactions can be incredibly time-consuming, requiring significant resources from the company’s leadership team. Underperformance can jeopardize a transaction’s completion, particularly in a fiercely competitive market, and prolong the process unnecessarily. The packed schedules of management teams mean they risk losing sight of their priorities and allowing their business performance to suffer during an M&A process.
An advisor should be capable of taking on many of the administrative tasks associated with the transaction, freeing up your team to focus on core business operations. For example, they should lead the due diligence process, which involves reviewing financial statements and other documents to identify risks and liabilities. Advisors should also be able to draft legal agreements, manage communications between the various parties and quickly prioritize what is essential throughout the transaction process. Talk to your prospective M&A advisor to learn how they typically address these kinds of responsibilities.
Advisors typically also offer the use of financial tools. For example, ask the advisor if they offer financial modeling to help you better analyze and assess the economic impact of your potential transactions. This modeling software should create detailed financial projections and perform sensitivity analyses, which enables the advisor to evaluate the potential outcomes of different deal structures and identify areas of risk or opportunity. I also recommend choosing an M&A advisor who offers advanced data analytics tools to perform deep-dive analyses on market trends, competitive landscapes and other key indicators.
During an M&A transaction, emotions can run high, and it can be easy to make decisions based on personal feelings. A trusted M&A advisor can provide objective advice that is grounded in industry knowledge, data and analysis. This helps you avoid common pitfalls, such as undervaluing a target company or making concessions that are not in your best interest.
Keep these things in mind when assessing for objectivity: Firstly, it is important to evaluate the advisor’s level of independence. Look for an advisor who has no conflicts of interest or hidden agendas that could influence their advice.
Secondly, evaluate the advisor’s approach to deal structuring. Look for an advisor who is willing to explore multiple deal structures and who can provide objective advice on the pros and cons of each option. This can help ensure that the transaction is structured in a way that is fair and beneficial for all parties involved.
Finally, consider the advisor’s communication skills. Look for an advisor who is willing to listen to your concerns and address them in a thoughtful and constructive way.
M&A transactions carry a range of risks, including financial, legal, and reputational. An advisor should have a good track record for identifying such risks and developing a solid game plan that can help you mitigate or avoid them altogether. This can include everything from conducting thorough due diligence to negotiating effective indemnification provisions in the deal agreement.
Specifically, you will want to choose an advisor who has a well-defined and comprehensive risk management process in place. This process should include the identification of potential risks, the assessment of the likelihood and impact of those risks and the development of strategies to mitigate or avoid them. It is important to review the advisor’s risk management process and assess its effectiveness. Ask the advisor to provide examples of how they have successfully managed risk in previous transactions.
An experienced and knowledgeable advisor can provide strategic guidance, objective advice and access to a network of professionals that can help you navigate the complexities of the transaction and achieve your business goals. By partnering with the right one, you can greatly increase your M&A transaction’s likelihood of success, setting your business on a path to long-term growth and profitability.
Book Dave Cantin to speak at your next industry event and discover how to identify the top qualities of a trustworthy advisor. As a seasoned entrepreneur and M&A expert, Dave has the experience and insights to help your team make informed decisions and achieve their goals. With a dynamic speaking style and a gift for engaging audiences, Dave can motivate your team and inspire them to take action. Don’t miss this opportunity to bring Dave Cantin to your event – contact us today to book him for your next speaking engagement, and connect with Dave on LinkedIn!
During stable times, businesses often grow and thrive, competition can increase, and the value and quality of products and services can reach all-time highs. But when the business environment is hit with internal or external negative factors, that uncertainty can cripple—if it doesn’t completely put out of business—any company that does not have strong leadership in place.
Economic conditions, political instability, fluctuations in market demand and changes in consumer behavior can significantly impact a business’s performance and solvency. Company leaders must have resilience and foresight in order to survive and succeed. You may be successful today, but tomorrow holds no guarantees. That is why it is important for any CEO to continually evolve and adapt.
It happened to me. When Covid-19 hit, my business—like so many others—was shuttered. Our main channel of providing financial services and advising our clients within the automotive sector vanished. What didn’t vanish, however, was their continued need for council—arguably during a time when many clients and the industry needed such information the most. To address this need, I created a podcast to regularly disseminate that information. We adapted by providing content on what dealers needed to know during the pandemic, along with insights that would help them be successful in their business when the “new normal” set in.
It’s crucial for companies to be flexible and agile in their approach to business operations. This means being willing to adjust strategies, pivot to new markets and adopt new technologies quickly. It is this type of pivoting that can keep you in the forefront as one of the leading companies in your industry. I’ve noticed that the companies that are able to pivot and adapt to changing conditions are more likely to thrive.
According to PwC’s “2023 CEO Survey,” 50% or more of those surveyed said changing customer preferences, regulatory change, skills shortages and technology disruptions will be the key factors most likely to impact their industry’s profitability over the next 10 years. Business leaders often face the challenge of establishing authority within their business sector and knowing when to adapt in order to ultimately grow. This can be especially difficult in a crowded market or when competing against larger, more established companies. However, with the right strategies and tactics, CEOs can build credibility and establish themselves as leaders in their industry for the long term.
I think one of the most important things a business leader can do to establish authority is not only to become an expert in their field but also to have the foresight to look beyond their core area of expertise. This means staying up to date with the latest trends, developments and best practices in their industry, and being able to speak intelligently and confidently about the products or services that are impacting industry trends or driving change within their market.
Another key strategy for establishing authority is to build relationships with other industry leaders and influencers. This can be done by reaching out to other business owners, bloggers and experts in your field, and offering to collaborate on projects or share knowledge and resources. By building these relationships, small-business owners can tap into the networks and reputations of more established industry leaders and gain credibility and visibility for their own business.
In the end, success is about building the strongest relationship possible with your customers. It only takes a few negative customer experiences to derail your brand, impact your revenues and stifle your market share growth. Chief executives and business owners can establish authority by providing excellent customer service and maintaining a strong reputation. This means going above and beyond to meet your customer needs today and having the fortitude to solve potential future problems. Three key steps to accomplish great customer service include:
By providing a consistently high level of customer service, I’ve found small-business owners can build a strong reputation and attract more customers to their business.
Finally, invest where you see near- and long-term growth potential, and be prepared to build more aggressive, dynamic ventures. Establishing authority within a business sector can be challenging for young CEOs and small-business owners, but it is not impossible. By becoming an expert in your field, building relationships with other industry leaders, and providing excellent customer service, small-business owners can establish themselves as leaders in their industry and attract more customers and clients.
The bottom line: Adjust your business model to reflect the shifting landscape, consider how you can capitalize on new trends, and deliver higher value for sustainability today and growth for tomorrow.
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