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Seven Important Reasons to Use an Investment Banker when Selling your Business

For a business owner looking to sell their company, having an investment banker or M&A advisor on their professional advisor team can add considerable value to an M&A transaction in terms of sale price, deal structure, time, and probability of closing. Here are seven ways a business owner can benefit from using an investment banker to sell their business.  

  1. Expertise in valuing and positioning a company for sale: Investment bankers have extensive experience in assessing the value of a business, and can help to position it in the best possible way to attract potential buyers.
  2. Creating an Auction Environment: Having an investment banker manage your business sale process lets all potential buyers know that they are not the only game in town. If a buyer contacts a business owner inquiring about a sale, the buyer is most likely assuming they are the only game in town and their offer will reflect that. But if the seller is using an investment banker, and they are running an organized process, then buyers automatically know that they are in an competitive environment. Therefore, their offers will reflect that fact and their bids will reflect what they are actually willing to pay for the company. . 
  3. Saving Time: Selling a business can often take 500+ hours of work over a period of six to ten months. It is very difficult for a business owner to both run their business and actively manage a time consuming business sale process. 
  4. Access to a Wide Range of Potential Buyers: Investment bankers have a wide network of contacts in the investment community, including private equity firms, strategic buyers, family offices, search funds, and other potential acquirers. 
  5. Experience in Negotiations and Deal Structuring: Investment bankers are skilled in negotiating and structuring deals, which can help to secure the best possible terms for the sale of a business.
  6. Knowledge of the M&A Process: Investment bankers have a deep understanding of the merger and acquisition process to include marketing the company, soliciting indications of interest, management meetings, soliciting letters of intent, navigating the due diligence process, and negotiating the purchase and sale agreement.
  7. Confidentiality: Investment bankers can help to maintain confidentiality throughout the sale process, which can be important for business owners who want to avoid tipping off competitors or alerting employees to the sale.

ACT Capital Advisors is here to help you every step of the way. For more information, contact us today.

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