Transaction Advisory Services Catered to You
As the owner of a business with revenue between $1 – 20 million, you’re probably too big for business brokers, but too small for most Mergers and Acquisitions (M&A) firms. Your business is in a category referred to as lower middle market. That’s where we come in.
Business Brokers VS Mergers & Acquisition Firms
Business brokers typically focus on “Main Street” businesses—smaller retail and service businesses generally providing products and services to consumers, with revenues under $1 million. The knowledge, sophistication, and selling process for these types of businesses is far different than that required for lower middle-market businesses.
Because of their structure and overhead, most M&A firms prefer to work with larger businesses, although some lower middle-market businesses can fall into this category. Lower middle-market businesses are often more problematic because they haven’t implemented the systems and strategies of larger companies.
The following table outlines some of the major characteristics of business brokers, M&A firms, and the Alberta Business Exchange.
|Business Brokers||Alberta Business Exchange||M&A Firms|
|Business Type||Local; business to consumer||Local or regional; business to business||Local, regional, national or international; business to business|
|Owner Involvement||Completely dependent on single owner/manager||Minor dependence on owner||No dependence on owner|
|Management||Little to none||Management in place or there is a near-term view to implementing a management team.||Strong management team|
|Information provided to buyers||Brief overview of business||Comprehensive Confidential Information Memorandum||Comprehensive Confidential Information Memorandum|
|Number of engagements||5-20||2-4||2-4|
|Buyers||Local; new owner/manager||Individuals, larger companies, or private equity firms||Larger companies or private equity firms|
|Marketing||Primarily online ads and company website||Comprehensive, strategic buyer research and online ads||Comprehensive, strategic buyer research|
|Representation||Can work for both seller and buyer||Work exclusively with seller||Work exclusively with seller|
|Level of confidentiality||Low to moderate||High||High|
|Deal complexity||Easy||Moderate; Some involvement by accountants & lawyers, but no more than necessary||High; Strong involvement by accountant & lawyers|
|Fees||100% commission||Modest retainer; Success fee, less retainer||Significant retainer and/or work fees; Success fee|
|Timeline to sell||A few weeks to a few months||4-6 months||9-12 months|
|Success rate||20-50%||Over 90%||Over 90%|
We offer the same level of professionalism and sophistication as larger Mergers and Acquisitions firms, but focus on eliminating unnecessary complexities from the process. Over the years, we have found that many parts of the process can be streamlined without affecting the quality of the transaction.
We do more than just sell your business. Because we’re not a large firm, we are able to establish a strong relationship with you and become your trusted partner every step of the way.