M&A advice for your consultancy – when, why and how? 

Selling or securing investment for your consultancy is one of the most significant business decisions you will make. 

Here are 10 questions you should know the answers to that could make the difference between a smooth, successful transaction and a stressful, costly failure. 

1. Why do I need an M&A adviser for my consultancy? 

An M&A Adviser can help you achieve your goals in the following ways.

• Advising you on your different strategic options, from EoT to MBO to PE to Trade sale, and helping you decide which is the right option for you 
• Helping you prepare your business for sale so that which ever route you take you maximise the value of your firm 
• Guiding you through the exit/investment process from start to finish 

2. Why is my choice of adviser so important? 

• Most people only go through a transaction of this nature once or twice in their lifetime and it is typically a life changing event 
• On average, more than 50% of deals fail and the quality of your adviser has a significant bearing on the success or failure of a transaction 
• A failed deal will not only absorb a large amount of resource, it can have a significant emotional impact on you, the owners  
• Given the complexity of an exit, having the right adviser who understands your business and your goals will ensure you’re getting the best advice 
• Your adviser will typically present you in negotiations and so you need to be comfortable they can be your voice. 

3. When should I engage an adviser? 

• We would not recommend entering into a formal relationship with an adviser until you have decided on your chosen direction, and you are ready to prepare the business for exit. 
• Certain advisers can be very helpful informally, in supporting strategic decisions related to exit strategy well ahead of any transaction. For example, educating owners on the different exit options and facilitating alignment between shareholders.
• Other advisers are only interested in you when you are ready to transact. 

4. What should I look for in an M&A adviser? 

• Look for experience in your industry, a strong track record of successful transactions and a good ‘strike rate’ (deals completed/deals started). 
• Ensure they get what you do and are able to articulate potential synergies between your company and possible acquirors. 
• A good cultural fit is important because it is likely that some decisions will be difficult and need to be made under considerable time pressure leading to a build up of stress. 

5. How do I find the right adviser? 

Like any important decision in life, personal recommendation goes a long way, so start by talking to Luke Badiali at The Consultancy Growth Network. We have put together a panel of specialist consultancy M&A advisers all of whom have been recommended based on direct experience of members of our community. 

TCGN can also help direct you to the M&A Advisers able to support you with exit planning tasks such as understanding your buyer universe, shareholder alignment and due diligence readiness. 

6. What are the costs involved in hiring an M&A adviser? 

• Costs typically include retainer fees, success fees, and expenses related to due diligence and transaction execution. Make sure you clarify fee structures upfront. 
• Some advisers will propose a ratchet which means they earn proportionately more, the more they get for your business. This structure can certainly align the seller and adviser goals.  

8. How long does the M&A process usually take? 

The process varies depending on the complexity of the transaction and whether the transaction has been triggered by an approach or by the seller going to market looking for a buyer. On average an exit process involving outreach will take 9 – 12 months whereas a deal with a known, motivated party could be done in 6 months.  

9. What are the risks? 

• Going through a transaction is a large amount of work and as such will typically occupy at least one owner for a significant portion of their time. This needs to be considered in the planning stage so that you go to market at a time when you have the bandwidth to support the process. 
• Acquirers will often seek to get close to your clients and your staff before they have signed the deal. This is where your M&A Adviser can help you in making the right judgements to ensure you protect your business should the deal fall through. 
• The devil is in the detail. Make sure you know what you are signing up to, in particular the terms in the SPA that govern your responsibilities post event. Don’t allow your excitement of a big pay cheque to cloud your judgement. 

10. What should I expect after the M&A transaction is completed? 

• Expect a transition period involving integration and alignment of business operations. Your adviser can provide post-transaction support to ensure a smooth transition. 
• Be mindful that you no longer own the business and so your level of empowerment will be dictated by the terms of the Sale Purchase Agreement (SPA). 

Navigating the M&A process is complex, and the choices you make early on will have a lasting impact on your future. Before you take the first steps on your exit journey, speak to us at The Consultancy Growth Network. We’ll connect you with the best M&A specialists to help you make informed decisions that meet your commercial and person objectives. 

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