by Paul Donnelly
Choosing the right M&A advisor is perhaps the most critical variable in the success or failure of any deal. A good advisor has the skills, experience, contacts and industry competence to manage a successful M&A process that delivers transaction options that align with the client.
When many emerging growth and middle market firms begin this process, their decision makers are often enticed by the attention of the "big brand" investment banks. We used to refer to them as the “bulge bracket” or “super regionals.” And, if you aren't particularly well-versed in the M&A sector, attention from the “big brands” may fuel a false expectation of value.
The truth, however, is that business owners in this situation are almost always better off choosing to forego the big brand in favor of an advisor with the right experience and enthusiasm -- and here's why.
Brand vs. Experience -- and Why It Matters
The M&A sector is no different than any business space in that people often equate size with competency or quality. And while this might make sense at first glance, it doesn't pass muster upon closer inspection.
Consider this: If a middle market company seeking an advisor takes its business to a large Wall Street firm, there's an excellent chance that things get lost in the shuffle. Big brand investment banks also have big brand enterprises for clients, and it's unlikely that smaller companies and smaller deals are going to take priority.
Additionally, the big brands are going to assign their most talented staff to their largest (and most profitable) clients. While that may be good business, that's little consolation to the middle market company that gets assigned the B or even C team while the A teams are busy servicing larger clients.
Now let's consider the other side of that equation: Companies that partner with reputable and deeply experienced boutique advisories are going to receive a level of customer service from more experienced advisors that big brands are simply incapable of matching.
Smaller advisors are often nimbler, more attuned to deal dynamics and capable of quickly changing course when conditions call for it. Businesses are much more likely to get the best a smaller advisory firm has to offer.
When you combine these advantages with the right level of experience, you have an ideal situation for middle market firms. That equates to great customer service, access to high-quality advisors with enough experience to possess both keen insight into industries and the skill to identify and close deals.
By considering core questions such as these, business owners can ensure they are paired up with a knowledgeable and experienced partner with the deal-making chops to close.
Looking for an Experienced Partner?
Paul Donnelly and the Coil Partners Team offer corporate finance advisory and investment banking services for emerging growth and middle-market firms. We have a demonstrated record of deal-making success, closing more than $3.75 billion in transaction value.
If you have any questions about finding the right M&A advisor, we urge you to contact us today: (949) 596-7172