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Finding the Right M&A Advisor

Finding an accomplished and trustworthy M&A advisor can be hard. This is particularly true for firms in the lower middle market (those with annual revenues between $20 million and $250 million). Deals of this size are often pushed to less qualified teams that struggle to provide sound purchase and sale guidance.

What’s more, in-house talent and experience varies at every advisory firm. You may think you’re getting good advice based on a well-known brand, but don’t rely solely on that.

It’s crucial to be thoughtful when selecting an M&A advisor. If you’re in the lower middle market and not sure what to look for, this article is for you. We’ve outlined some important factors that should be considered.

What to Look For
Your M&A advisor should be able to assist with all aspects of coverage and risk, from pre-close diligence to closing and beyond. This includes property, casualty, surety, cyber, management liability / D&O / EPL, reps & warranties, employee benefits and retirement / 401(k). As a prospective buyer, you should also expect:

Commitment
Does your advisor consistently commit to clients in the lower middle market? Some companies cherry pick deals that seem more profitable or meet minimum revenue thresholds. Choose an advisor who truly wants to earn your partnership, regardless of deal size.

Attention and engagement
Will your advisor view the deal from your perspective and remain involved from start to finish? It’s important that they ask questions, make decisions that match your wishes and stay involved throughout the process. Your deal can go south if your M&A advisor is unengaged or loses sight of your goals. They must look beyond the insurance elements and consider the bigger picture.

Flexibility and creativity
Can your advisor tailor services to meet your specific needs? While many service models are similar, some advisors rely on templates that result in a one-size-fits-all approach. The service should be meaningful and useful to you, so find an advisor who is willing to think critically and independently.

Fair pricing and transparency
Does your advisor have minimum revenue thresholds or do they bill by the hour? You want them to be virtually unencumbered while having access to all the necessary resources. They should be able to net out commissions and charge fees to drive transparency on the compensation for the work performed. Their overhead might be too high to do this, or they could have the financial burden of pleasing public shareholders. It’s important to look out for potential influences like these.

Hiring insurance and employee benefits professionals who are knowledgeable, practical and responsive can strongly impact your deal. The right M&A advisor can help improve terms and strengthen a buyer’s decisions pre- and post-close. Ideally, you should have a competent and organized single point of contact leading a broader team of experts. Your advisor should collaborate with you every step of the way and use direct and honest communication. You should also receive timely and practical risk assessments and recommendations (i.e., program structure, costs, red flags).

Where to Look
With so much to consider, it might seem impossible to find an M&A advisor who checks every box. We recognize this can be an even bigger issue for lower middle market deals. In response, we formed a dedicated team that focuses on M&A advisory services for this particular niche. Our professionals have in-depth insurance and benefits expertise and have worked extensively with contracts, HR, marketing and operations. They are ready to provide competent and comprehensive service, regardless of deal size.

If you are looking for an M&A advisor, do your research. Remember what to look for and don’t settle for less. Your deal is too important to be entrusted to just anyone.

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