Why Investment Bankers are Your Most Valuable Asset

Research consistently shows that the additional cost of an investment banker is a fraction of the value they add.  

Increased Sale Price

Research consistently shows that the additional cost of an investment banker is a fraction of the value they add.  

According to a 2016 survey ‘The Value of Middle Market Investment Bankers’ conducted by Fairfield University, “84% of respondents cited the final price as being equal or higher than the initial sale price estimate provided by the investment banker.” 

PCE’s analysis of reported transactions indicates an owner can receive a purchase price more than 25% greater with an investment banker. 

If you want to get more out of the sale, without added stress and work, an investment banker is your best ally.

(Thinking about selling? Take this Readiness Assessment to determine if your company is ready, almost ready, or not ready for a sale.)

Unparalleled Experience

No matter how much of your life you’ve devoted to your business, you’re a novice when it comes to the sale of your business. Most owners will sell a business once, or at most twice.

No one is an expert when they do something the first time, no matter how competently they have run their business. This is particularly true when it comes to something as complex as selling your business.

An investment banker has the deep knowledge and understanding of selling businesses. He or she will be able to provide you with the insight needed to clarify your options in order to help you get the most value for your business.

Navigating the Negotiation Process

You might be great at negotiating vendor contracts, and a pro at hiring. But how much experience do you have negotiating the sale of a business?

None? Little?

If so, you’ll be woefully outmatched by the other side’s professional team of experienced advisors. 

Your investment banker levels the playing field. A good investment banker will help ensure that you maximize your value while receiving fair terms for the size and type of business you are selling.

Remember that the amount of cash you get from a deal is about more than just sale price. It also depends on the deal terms and structure.

A small change in the contract might have far-reaching consequences you do not even consider. An investment banker remains aware of these issues and how they will affect your proceeds.

An investment banker brings meaningful experience to the table.

That experience may translate into a substantially higher sale price. That is especially true if the buyer has made numerous acquisitions.

Most buyers have significant transaction experience. Hiring an advisor positions you to maximize value under the optimal terms.

Preparing for Due Diligence

Due diligence can make or break a sale. Buyers do not like surprises. Negative information can change the total value of the business, delay a sale, or alter the terms to be less favorable to the seller.

Preparing for due diligence is not easy, but the process can greatly increase the value of your business.

A skilled investment banker with industry-specific knowledge can help you prepare for due diligence and get ahead of potential due diligence issues before they are used against you.

Adding Value

Investment bankers directly add value to a business by helping you identify changes that can attract the right buyer and increase the value of the business in the eyes of that buyer.

Value is, after all, ultimately in the eye of the beholder.

An experienced advisor can help you identify the ideal buyer early on. He or she will then work to make tweaks to your business that increase value.

The earlier you hire an advisor, the better, since adding value can take a year or longer.

Partnering with Other Experts

The right investment banker has deep industry connections, and experience with numerous advisors. He or she can help you choose the right team, avoid spending money on professionals you do not need, and even interview and hire other professionals on your behalf.

You want to build a team that has sold numerous companies in the past. A skilled team will provide value far beyond the fees you pay them.

Contact us today to get more information on how an investment banker can help you get the greatest value when selling your business.

If you have comments or questions about this article, or would like more information on this subject matter, please contact us.

Michael Rosendahl

 

Michael Rosendahl, Shareholder

Investment Banking

mrosendahl@pcecompanies.com
New York Office

407-621-2100 (main)
201-444-6280 Ext 1 (direct)

407-621-2199 (fax)

Andre Sutherland

 

Andre Sutherland

Valuation

Orlando Office

407-621-2119 (direct)

asutherland@pcecompanies.com

Connect
407-621-2119 (direct)

407-621-2199 (fax)

Daniel Kvarnberg

 

Daniel Kvarnberg

Valuation

Orlando Office

407-621-2132 (direct)

dkvarnberg@pcecompanies.com

Connect
407-621-2132 (direct)

407-621-2199 (fax)

David Jasmund

 

David Jasmund

Investment Banking | ESOP

Orlando Office

407-621-2111 (direct)

djasmund@pcecompanies.com

Connect
407-621-2111 (direct)

407-621-2199 (fax)

Eric Zaleski

 

Eric Zaleski

Investment Banking | ESOP

Chicago Office

847-239-2466 (direct)

ezaleski@pcecompanies.com

Connect
847-239-2466 (direct)

407-621-2199 (fax)

klopfenstein-mark-square

 

Mark Klopfenstein

Advisory

Atlanta Office

678-596-6306 (direct)

mklopfenstein@pcecompanies.com

Connect
678-596-6306 (direct)

407-621-2199 (fax)

Melissa Ritter

 

Melissa Ritter

Investment Banking

Orlando Office

407-621-2128 (direct)

mritter@pcecompanies.com

Connect
407-621-2128 (direct)

407-621-2199 (fax)

Michael Rosendahl

 

Michael Rosendahl

Investment Banking

New York Office

201-444-6280 Ext 1 (direct)

mrosendahl@pcecompanies.com

Connect
201-444-6280 Ext 1 (direct)

407-621-2199 (fax)

Will Stewart

 

Will Stewart

Investment Banking | ESOP

Orlando Office

407-621-2124 (direct)

wstewart@pcecompanies.com

Connect
407-621-2124 (direct)

407-621-2199 (fax)

whitcomb-woody

 

Woody Whitcomb

Investment Banking

Orlando Office

407-621-2113 (direct)

wwhitcomb@pcecompanies.com

Connect
407-621-2113 (direct)

407-621-2199 (fax)

poole_michael

 

Michael Poole

Investment Banking

Orlando Office

407-621-2112 (direct)

mpoole@pcecompanies.com

Connect
407-621-2112 (direct)

407-621-2199 (fax)

vogt-paul

 

Paul Vogt

Valuation

Atlanta Office

678-641-4760 (direct)

pvogt@pcecompanies.com

Connect
678-641-4760 (direct)

407-621-2199 (fax)

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