The M&A advisor plays a pivotal role
There has never been a more diverse acquirer market for agencies, consultancies, and tech service providers.
Alongside the established names, new buyers are emerging every month – from adjacent sectors or geographies, often driven by private equity investment and a ‘unique’ strategic plan to disrupt the market.
The M&A advisor plays a pivotal role in navigating this dynamic landscape
But if that’s true, why are M&A volumes down?
Well, for a couple of reasons.
Firstly, many potential sellers are uncertain of their forecasts in the current climate. Amid tech and banking crises, few are immune to potential losses of client income. And with most deals being contingent on future performance to deliver the full value, founders are being understandably cautious about instigating a sale process in the face of uncertain trading.
There are also those founders who have set their hearts on the multiples (real or imagined) bandied about at the peak of the market a year or so ago. As buyers actively try to manage expectations and their own risk profiles, these founders have decided to wait for the super-premiums to return.
(Spoiler alert: they won’t)
The truth is the M&A market is in rude health but is suffering by comparison to two years of unprecedented activity and some genuinely unfathomable valuations.
The blistering pace of digital & data transformation, tectonic shifts in the geopolitical landscape and a ready supply of private equity dry powder continue to produce a dizzying array of options for potential sellers.
An M&A advisor is indispensable in guiding businesses through this dynamic landscape
It’s not just about the multiple, the best deals result from a compelling strategic logic and strong cultural alignment.
Getting this right can remove some of the uncertainty in trading forecasts, as the best deals will drive faster growth and compensate for risks in existing client portfolios. Competitive tension helps as well, not just to drive value, but to allow comparison and to ensure that all angles are considered.
The vital role of M&A advisors in today's business landscape
As a result, the role of an expert M&A advisor has never been more critical to success. Founders need an objective view of their company through a market lens, to understand the attributes that will drive value, represent risk, offer potential synergies and drive future growth.
They need market access – a firm with connections to the full range of buyers, old and new. And they need a trusted advisor to assess and negotiate on their behalf and guide their decision-making.
But don’t just take my word for it.
Conall McDevitt, CEO of Hume Brophy, was interviewed on this subject, having just completed a sale to Penta Group.
Click on the links below to hear Conall’s insights on their journey, from choosing an M&A advisor to work with, through assessment of their options, to the intricacies of the deal process.
Why Hume Brophy chose SI Partners as their Corporate Advisor
The importance of a Strategic Corporate Advisor
How SI Partners conducted Hume Brophy's sale to Penta