How to select the right intermediary


When you are considering appointing an intermediary or advisor to help you sell or buy a mid-market company it is important to select a good one. There are a few decent advisors but there are many whom are inexperienced and purely chasing the next commission cheque. Acquiring or selling a multi-million dollar business is a serious matter and you should have the best possible representation. Based on 25 years’ experience of buying and selling companies I have developed a few guidelines to help you select the right one.

1. Business experience. There is a big difference between advisory experience and business experience. Many advisors have never started or managed a business, paid a wage or signed an office lease, and cannot fully relate to the needs or concerns of the buyer or seller. The best is to select an intermediary that is also an entrepreneur as their business acumen will often assist to overcome obstacles in the deal process.

2. Deals experience. To successfully close your transaction the intermediary personally must have a good track record of many deal closures. Some large advisory firms will allocate to a transaction a novice who may have worked on one or two “large” deals but lacks the deals closing experience or variety to overcome the complexities that arise frequently.

3. Technical Knowledge. A multi- million dollar M&A deal can be complex. A good intermediary would have spent thousands of hours mastering the necessary accounting, finance, structuring, taxation and legal requirements to facilitate and negotiate the sale, acquisition or merger of a company. Check their qualifications, knowledge and skills across this broad spectrum of requirements. Although the deal may require specialised professional advisors, the intermediary needs a high degree of technical knowledge to mediate the different positions and arguments that the parties may take. A lack of technical knowledge can easily cause a deal to collapse or not being maximised.

4. Trust. Your sense of trusting the intermediary should be a top priority. Try to understand the value system of the person and the source that drives them to do the right thing. Ethics and transparency usually become a real issue in the midst and heat of a complex deal. Remember that the intermediary is your chosen representative so you must trust them.

5. Sales & Marketing capability. In essence M&A is a sales & marketing effort. Without a seller and a buyer we have no transaction – we have nothing. To find the right business or acquirer requires a sophisticated marketing effort. Most advisors are from an accounting, finance, investment banking or legal background with little to no sales & marketing experience or capability. You need to question them on their techniques for sourcing qualified prospective acquirers and finding quality businesses. Try to understand their sales skills as you will be working closely together over months to close the deal.

6. Chemistry. A typical M&A transaction can take 3 to 12 months to close plus a further period for escrows, earn-out, lock-up or other performance obligations. You want to work with someone that you believe you can get along with through good days and tough days. Someone you can even enjoy to spend time with and inspire each other. Also someone you think will get on well with your accountant and lawyer as well as the other side of the transaction. Can the intermediary build a bridge between all the parties when things get tough? Look out for that special chemistry.

7. Grit. To succeed in the complex M & A world it is essential to be passionate with perseverance. At least 10 years of staying power is required to build belief, wisdom and confidence with substance. You want a seasoned representative that will persist with joy through the entire journey to closure. A good intermediary is the committed one that will not panic when the deal seems to go off the rails but will also not become complacent when all seems good.

8. Expert matter. You are better off to select an intermediary who is considered an expert in dealmaking of your transaction size and industry. Expert status may only be attained after a minimum of 10 years and 25 deal closures. Only an expert can sufficiently anticipate potential complications and effectively respond to sudden difficulties.

9. Grey matters. There is no substitute for life experience. M&A is about dealing with another person that must make a decision to buy or to sell the company. Effective persuasion and negotiation skills are directly linked to your ability to draw parallels with real life stories and incorporating these into the process.

10. Competitive Fire. The M&A market is extremely competitive. There are many companies for sale but few are great businesses. Likewise there are many acquirers wanting to buy but few are qualified with the means to settle. How competitive is your intermediary? Be sure to check the track record and ask how they intend beating the competition. Is there still fire in the belly and a confident determination to succeed?

Written by Tony Wiese, principal at Wiese & Stone M&A advisory

Complacency can destroy your value.


After reviewing some near fatal corporate collapses recently it made me wonder if there was a common cause. After more investigation it became clear that these companies indeed suffered the same problem – complacency by the leadership!

I was intrigued as to the reasons why complacency could set in when companies are competing fiercely in this technologically advanced age we live in. After all, we know how important innovation and creative thought is for an organisation to remain relevant and competitive.

In the early years of the organisation the entrepreneur is visionary and filled with passion. Creativity flows from this and the team innovates consistently as new ideas are tried and tested. Goals, strategies and action plans are regularly upgraded and relentlessly pursued. The grit is contagious and the senior leadership is highly motivated by purpose and passion. The results and growth is astounding and the company thrives. Management is applauded and admired. They hold each other accountable.

Then the unthinkable happens. The leadership becomes too comfortable and complacency sets in. The following questions should be honestly evaluated:

  • Do you still have the burning passion, perseverance and grit?
  • Are you as creative as you were around marketing, packaging, social media, new services or product lines, smarter supply chains and distribution channels?
  • Do you still have the capacity and motivation to drive consistent innovation?
  • Can you still beat the competition or do they now scare you?
  • Are you still thinking ahead of the curve of your industry’s latest technology, big data, artificial intelligence, machine learning, augmented reality, robotics and blockchain?
  • Is your customer experience still superior and relevant?
  • Do you still have the physical energy to run ahead and lead the team?
  • Are you relying too much on others and maybe too trusting without the necessary checks and balances?
  • Are you tired?

Brilliant individuals lose their wealth and reputation by failing to recognize complacency.

No leader escapes these complacencies indefinitely as we all grow old and tired. The same for corporates. We have to recognize when the time has come to reinvigorate, replace and renew. This may mean it’s time to sell and exit your business or expand and grow a new team.

It is this judgment of precise timing, rather than your achievements, that may determine your legacy and wealth. We have again just recently become aware in the media of brilliant individuals whose reputations are in tatters or whom have lost billions of dollars because they did not timely recognize the signs and act for change.

We cannot become complacent for too long and expect premium multi – million dollar outcomes.

Written by Tony Wiese, principal at Wiese & Stone M&A advisory