What Does Professional M&A Advisory Bring � and Do I Really Need an M&A Advisor for My Business Sale?
For most owners, selling a business is not an everyday topic but a once-in-a-lifetime event. The uncertainty is correspondingly great when it comes to finding the right path. One of the central questions is: Should I hire an M&A advisor � or is it ultimately just an expensive luxury that costs more than it brings?
The good news: Both practical experience and scientific studies provide a clear answer. Professional advisory pays off in the vast majority of cases. Because it not only increases the sale price but also the likelihood that the deal will actually close. And it ensures better contract terms that mean real money for sellers.
What Do the Data Say?
To answer this question not just intuitively, it is worth looking at the facts. A comprehensive study by Tilburg University and Heidelberg University evaluated several decades of M&A transactions. The result is clear: sales with a sell-side advisor achieved significantly higher prices and acquisition premiums than those without. The likelihood of a deal actually closing also increases noticeably when a professional advisor is involved on the sell side.
Particularly compelling: the researchers refuted the potential accusation that �good companies� hire advisors more often anyway. Through sophisticated statistical methods�including matching procedures and instrumental variable approaches�they were able to show that the effect is actually causal, arising directly from the use of the advisor.
Auch abseits der Wissenschaft best�tigen Industriesreports f�r den Mittelstand den Trend. Dort werden regelm��ig Mehrerl�se zwischen 6 and 25 percent genannt, wenn ein professioneller M&A-Advisor eingeschaltet wird.
Mit anderen Worten: Die Wahrscheinlichkeit, dass sich die Consulting rechnet, ist sehr hoch.
Why Does an M&A Advisor Increase the Sale Price?
The reasons for this are quickly explained. A business sale is not a simple handshake deal but a highly complex process where many adjustments decide over millions.
A crucial point is the process design. An advisor organizes the sale to create competition�either through a structured auction or so-called �negotiauctions,� where potential buyers are pitted against each other in advance. This competition almost always leads to higher prices.
Added to this is the access to the buyer universe. An experienced advisor opens doors that business owners alone often cannot reach. This applies not only to known competitors but also to international corporations and private equity investors. The latter especially are currently sitting on enormous �dry powder��capital that must be invested. This investment pressure can directly translate into a higher willingness to pay.
Another added value lies in the professional preparation of information. Anyone who enters the market without thorough preparation risks buyers sensing risks and demanding discounts. A good advisor ensures that financial figures are secured with a Quality of Earnings report, forecasts appear realistic yet attractive, and the company�s equity story is clearly articulated. This reduces uncertainty�and uncertainty almost always costs money in the M&A process.
And finally there are the negotiations themselves. Whether it is about defining net debt, working capital adjustments, or structuring earn-outs: this is often where it is determined how much of the agreed purchase price actually reaches the seller. Experienced advisors know the negotiation leeway, use the right arguments, and utilize instruments like Warranty & Indemnity Insurance to reduce escrows. The result: higher net proceeds for the seller.
Not to mention: an advisor takes over the management of the entire transaction process. Data rooms, Q&A, timelines, coordination with lawyers, tax advisors, and auditors�all of this costs time and energy. Anyone who does not coordinate professionally here risks delays or even deal failure. Here too, statistics show: with an advisor, closing rates increase significantly.
When Does an Advisor Really Pay Off?
The math is surprisingly simple. Typical advisor fees in the mid-market are 3 to 6 percent of the purchase price. To recoup these costs, a price premium of just 3 to 6 percent is sufficient. However, reality shows uplifts of 20 to 30 percent�a multiple of the costs.
A small example illustrates this: Suppose a company generates 10 million EBITDA and could be sold without an advisor at a 7x multiple, i.e., for 70 million euros. With an advisor, the multiple is 20 percent higher, at 8.4�resulting in 84 million euros. Even with a 3 percent success fee (2.52 million), a net proceeds of 81.5 million remain. The additional proceeds after fees amount to an impressive 11.5 million euros�that is plus 16 percent.
So it remains clear: the right M&A advisor is not a cost factor but an investment in maximum sale proceeds�and in the assurance that your life�s work transitions under the best possible conditions.
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Note: Dieser Artikel ist Teil unserer Gesundheitswirtschaft-Serie. Contact Sie uns unter valuation@adamsstrategy.de f�r Advisory zu M&A im Pflegebereich.