Divestopedia M&A Fee Guide – 2023 – 2024

The Current State of M&A Advisory Fees

In partnership with Firmex, Axial, and DealCirle, Divestopedia’s seventh annual M&A Fee Guide 2023-2024 is the authoritative source on M&A fees for sell-side engagements in the middle market. Using data gathered from a survey of global mid-market dealmakers, the guide highlights key points of interest on M&A fees, shared across geographies and deal sizes.

Better Conversations on M&A Fees

In reading the guide, M&A advisors and business owners learn valuable insights on the expectations, negotiations, structuring, and associated practices surrounding M&A fees. The guide serves as a reference point on what would otherwise be a complex and highly variable topic—the pricing of M&A fees.

Key Highlights from the M&A Fee Guide 2023-24

• Nearly half of all middle market merger advisors say they raised fee levels in 2023, prompted mainly by rising costs and a more difficult deal-making environment.
• Many firms have also modified their fee structure to emphasize recurring engagement fees to mitigate the risk of deals that take a long time to complete or never close.
• The growing use of earn-outs and complex deal structures is prompting firms to redefine how they calculate and collect success fees.
• Smaller firms have been able to hold their fee revenue steady and, for many, increase it even as business at larger investment banks continues to fall off.
• One-third of the firms increased their profits in 2023. Those that increased fee levels were twice as likely to grow profits than those that didn’t.