What Does Merger and Acquisition Advisory Firm (M&A Advisory Firm) Mean?
Merger and Acquisition advisory firms are companies that provide guidance to other companies that intend to buy, sell, create or restructure their firms. Just as personal financial advisors provide guidance to individuals and small businesses, M&A advisory firms can help to steer a company through any type of corporate transaction, and assist with debt and equity financing in many cases. M&A companies can also assist with other tasks, such as:
Providing advice and guidance on the issuance and placement of stock.
Performing underwriting for new securities that are being issued.
Providing investment advisory-related services for individuals.
Calculate an accurate valuation for the company.
Get the highest possible price for the seller.
Show the company to prospective buyers.
Prevent the company from being sold at below fair market value.
Find the best possible buyer for the seller.
Ensuring that the sale transaction gets done even if contingencies arise such as the buyer being unable to acquire the necessary capital to fund the deal.
Most M&A firms charge a fee based on a percentage of the value of the deal being consummated. This fee can vary with the type of transaction being performed and the size of the deal. Some firms may also assess a flat retainer fee on top of the percentage fee.
M&A advisors generally cover transactions that are too large for most business brokers (with the transaction cutoff value being about $2 million or less than $1 million in EBITDA). They work on deals between those values and the medium and larger-sized deals for $100 million or more, which are usually handled by investment bankers. M&A advisory firms are therefore generally sought out by companies with annual revenues in the 5 to 10 million range. They generally take more of an active role in engineering a sale rather than a passive one.
