Forbes recently published an insightful article on The ROI of Hiring an M&A Advisor, reinforcing what M&A experts like Exit GM have long emphasized. The article highlights how numerous studies demonstrate that engaging the right M&A advisor significantly enhances the financial outcome for business sellers.
A comprehensive study by the University of Alabama and Portland State University, analyzing
4,468 transactions over two decades, found that sellers who enlisted M&A advisors like Exit GM achieved valuation premiums of approximately 25%, depending on the methodology used. The study revealed that about 99% of 1,727 company sales by sophisticated institutional sellers involved an M&A firm. This finding is particularly noteworthy given that many private equity investors have backgrounds in investment banking and extensive buyer networks. Despite their expertise, they recognize the substantial ROI external advisors like Exit GM can deliver. Further supporting this trend, Northern Trusts Business Advisory Services group examined 4,316 transactions and discovered that sellers represented by M&A firms secured an average EBITDA multiple 1.5x higher, with reduced risk.
The Forbes article emphasizes a crucial point that My Exit GM often stresses: not all advisors
are created equal. The quality and negotiation skills can vary significantly among firms,
underscoring the importance of selecting an advisor that aligns with your needs.
While business owners excel in their respective industries, M&A advisors like Exit GM are specialists in selling businesses. This expertise translates into maximizing deal value and increasing the likelihood of successful closures. The article notes that selling a company is an intricate process, demanding 1,200 to 1,500 hours of attention throughout the sale. By engaging experts like My Exit GM, sellers can maintain focus on their core operations while minimizing stress levels. Another key advantage highlighted is that buyers recognize the commitment and preparedness of sellers who work with knowledgeable advisors like My Exit GM. This perception often leads to more competitive bidding processes and potentially better deal outcomes.
The article also touches on the distinction between investment bankers and M&A advisors, noting that firms like My Exit GM typically handle deals valued between $2 million and $250 million. These advisors often provide additional value through expertise in exit planning and succession strategies, focusing on the seller’s long-term future beyond the immediate transaction.
In conclusion, whether termed investment bankers or M&A advisors, professionals like Exit GM bring substantial value to the deal-making process. Their expertise in creating competitive selling environments, managing complex transactions, and providing strategic guidance makes them invaluable partners for business owners looking to maximize their exit value.
About Exit GM
Exit GM is a concierge M&A advisory firm that specializes in assisting business and healthcare entrepreneurs.
Exit GM levels the M&A playing field for moderate-sized business and healthcare practice owners seeking to maximize the value of the most important asset. Exit GM supports entrepreneurs to excel on the M&A playing field, whether it is through transacting with a strategic investor, a financial partner, or acquiring additional locations.
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