The Current State of M&A Advisory Fees
In partnership with Axial and Firmex, the North American edition uses data from Divestopedia’s 7th annual M&A Fee Guide 2023-2024 survey and is an authoritative source on M&A fees for sell-side engagements in the middle market.
In reading the guide, M&A advisors and business owners will learn valuable insights on the expectations, negotiations, structuring, and associated practices surrounding M&A fees.
Key Highlights from the M&A Fee Guide 2023-2024
- 38% of North American middle-market merger advisors increased fee levels in 2023, prompted mainly by rising costs and a more difficult dealmaking environment.
- Many firms 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 prompted firms to redefine how they calculate and collect success fees.
- Middle-market firms were able to hold their fee revenue steady and, for many, increase it.
- Profitability largely held up despite rising costs. Those that increased fee levels were twice as likely to grow profits than those that didn’t.