M&A agencies are crucial if you want the M&A process to go smoothly and end fruitfully. There are simply too many things that can go wrong to try to handle the process by yourself.
If you’ve done M&A before, you probably know that. However, there are some unique services that even experienced businesspeople rarely know about. Those services can be just as useful as the basic services everyone turns to them for.
Today, we’re going to go over M&A financial services you probably didn’t know about. We’ll show how they can make a major difference in your M&A attempt, your life, and even your estate.
Let’s get started.
M&A Agency 101
If you’re new to M&A, this section will help you out. If you’ve done mergers and acquisitions before, you probably know what this is and can skip to the next section.
An M&A agency is a business that provides consulting and guidance services for business owners looking to sell, merge, or acquire in the business world.
On the surface, that sounds like a basic consultation service, but it’s actually a lot more complicated than that. Each of those three categories has numerous sub-categories and possibilities that need to be looked at, and since every company is unique, the way the M&A process is handled also needs to be customized on an individual basis.
Because of the complexity of M&A, an M&A agency is much more than just a standard consultation service. It’s a lifeline that ensures you are handling this complex process in the manner that best suits you and your business.
4 Little-Known Services M&A Agencies Can Help With
Now that we’ve got some of the beginner-friendly info out of the way, it’s time to dive into the services that even experienced business professionals might not be aware of.
Because an M&A agency’s services are so comprehensive, these will help with all sorts of M&A situations.
1: Post-Merger Integration Strategies
So, you know that an M&A agency can provide vital guidance throughout the M&A process, but what about the post-transaction phase? Most notably, what about the M&A integration plan?
When two companies merge, the integration process is usually more difficult than the transaction itself, and it’s where the most failures occur. Just like people, no two companies are the same. When you combine the two, like a marriage, there are various areas where conflict will occur.
Also, just like marriage or friendship, knowing how to navigate those conflicts is crucial for the long-term success of both businesses.
An M&A agency can help look at the financial situations, cultural differences, operational differences, and synergies of both companies to help you find an integration strategy that prevents the deal from being a failure.
This is something every company should try to leverage during and after a merger. It’s a failsafe to protect you against the perfect deal falling through because of minor conflicts and a lack of direction.
2: Taxation Navigation
Even in the middle-market space, M&A transactions tend to revolve around millions of dollars. Uncle Sam wants his cut of that, and he does not make it easy to understand.
While not a tax agency or anyone who is going to file your post-transaction taxes for you, an M&A agency can help you do a few things that will help.
First, starting during the beginning phases of the deal and throughout the transaction, an M&A agency can help you make decisions that will either lower your tax liability post-transaction or spread it out in a way that is far more manageable. Even if you’re not technically saving money, it is easier to pay smaller tax liabilities over a longer period than it is to hand over a massive amount of your profits right away.
An M&A agency can also guide you through structuring the end of the transaction in a manner that will alleviate or spread out your tax liability. There are a lot of ways that assets can be broken up and handled separately which allows you to have an easier time with the tax burden you’re taking on.
Finally, an M&A agency has enough experience providing financial advice that it can help you get an idea of what your tax liability will be. This obviously doesn’t help you change the outcome, but it does prepare you and help prevent you from getting unrealistic expectations at the end of the sale.
This also helps with post-sale planning, but we’ll talk about that in the next section.
3: Post-Sale Planning
So, you’ve spent 40 years operating a middle-market business, you’re just about to close on a deal, and you’re excited to start your retirement ahead of schedule. Everything’s great, right?
Well, that’s not how it goes for a lot of people when selling a business.
Unfortunately, the average retiree doesn’t know too much about finances, and even if they do, they overestimate what their value truly is in the long term.
Many retirees run their bank accounts dry within a decade, don’t have any assets to fall back on, and end up living far below the standard they thought they could. Even worse, there’s nothing left to leave as a legacy.
A good M&A agency understands this fact and will help you plan your post-sale life.
This includes a number of services.
First, there’s money management to think about. An agent can help you look at your overall value post-sale and develop a budget that you’re unlikely to outlive.
Then, they’ll help guide you toward setting up a portfolio you can invest wealth into for the long term, determine what types of post-life preparations you need to make, advise on lifestyle changes that can help, and more.
Overall, this ensures that the greatest earning event of your life isn’t turned into a nightmare a few years down the road, and you can get the absolute most out of it.
This isn’t something that is very useful if you’re merging, buying, or otherwise planning to stay in the business world, but we all stop working eventually, and it’s something to think about.
4: Making Your Exit from the Business World
The financial services M&A agencies offer aren’t just about mergers or acquisitions. In the same way, they can help you plan for the post-sale part of your life, they can help you plan for a run-of-the-mill sale, too.
Making your exit from your business is a massive step, and while it’s likely the largest earning event of your life, it’s also one that requires you to think of several different factors.
First, there’s the financial part of it. Are you in a good spot to sell? How much is your company worth? What strategy should you take to sell it? How do you find a buyer? Those are all questions a lot of middle-market business owners don’t know the answers to because they’ve never sold a business before. They poured their life into building the one they’re about to sell.
An M&A agency can help you navigate all those questions. For some things, it can directly navigate for you, and for others, it can help point you toward resources that can take a more direct approach. Either way, this is a crucial part of selling, and a lot of business professionals get it wrong; costing them millions of dollars or ending in a failed sale.
Then, there’s the logistics of it. You can’t just decide to sell the business one day, slap a “For Sale” sign on the window, and expect someone to come through with money.
You have to penetrate a target market, which can vary dramatically, and that requires a lot of strategy in and of itself. From selling it to employees, all the way to selling it to an investment group or competitor, your choice here matters. It also determines how fast the sale is closed and how likely it is you’ll get a buyer at all.
Maintaining your business throughout the process is also crucial. If you do certain things, such as tell people too soon, get preoccupied with the sale, or let debts build, your final transaction can end up being very lackluster.
An M&A agency can help with that by guiding you through those complicated decisions and letting you know when and how to let the cat out of the bag.
Finally, there is a moral side to the situation. You likely have employees who are like family. They rely on you for a paycheck to feed their actual families, and they dedicate most of their time to helping you find success. Not only is there a right way and a wrong way to sell the business, but which route you take can have consequences, too.
If you’re callous about it and only focus on yourself, your employees can all walk off the job and ruin your transaction. Your suppliers can pull back their support. Any number of things can happen, because while you’re the business owner, other people are involved.
However, it’s also your right to sell it, and you deserve to. So, an M&A agency will help you achieve that without you feeling guilty and backing out or sacrificing everything you have earned, as well.
Are These M&A Financial Services Worth it?
How worth it are these services, anyway? That’s something you might be asking yourself, and many of our clients do think that before they actually dive into the M&A process and beyond.
It’s okay. You’ve been operating a business and handling complex decisions for a while, and it’s a good thing that you’re confident when it comes to such situations.
However, just like everything else, some things simply require an expert.
Even if you have a general idea of what M&A is, how it works, and some basic strategies you can use, it’s completely individualized for every company. There are far too many variables for a surface-level understanding to get you through the process and to a desirable result.
That’s what makes M&A advisors worth it regardless of how much business experience you have.
An M&A business is dedicated to the entire process, and after years of operating, its team will have experienced practically every situation that’s possible. That real-life experience is invaluable. In the majority of cases, it also means the difference between earning millions of dollars in one transaction or watching everything you’ve worked hard to build fall apart before your eyes.
M&A agency financial services are worth their weight in gold. You get a better result, a smoother experience, and overall, a safeguard against all the things that can go wrong.
When is it Best to Contact an M&A Agency?
The best time to contact an M&A agency is when you start thinking about M&A opportunities seriously. Take a little time to research your options and the basics, but as soon as you transition to a more serious position on the matter, it’s time to call the pros.
The M&A process takes quite a lot of time, and it needs to be handled properly from the very beginning. Waiting, even if it’s just through the earliest stages, can lead to mistakes that impact the entire transaction. In some cases, the effects of not getting guidance can last well beyond the transaction itself.
Where Can I Find an M&A Agency?
Regardless of which type of M&A you’re pursuing, you need to have the best financial services that an M&A agency can possibly provide. This is a serious event, and you can’t afford to be guided by someone who doesn’t know what they’re doing.
Luckily, Final Ascent is here to help.
At Final Ascent, we leverage years of hands-on experience and industry-leading team members to guide our clients through every step of M&A. Even the initial preparation steps and the post-transaction steps that many agencies don’t handle.
This means that Final Ascent can be a partner through it all, and most importantly, a one-stop shop for all your M&A needs.
If you’re looking for help with your mergers, acquisitions, or just selling your business, contact Final Ascent today!