5 Best Practices for Selecting Your M&A Consulting Partner
When the time comes to sell your plumbing or HVAC business, following a few tips will ensure that your exit gets the best results. Selling your HVAC or plumbing business isn't a decision you enter into lightly. After all, you've put your heart and soul into growing this company, and letting it go won't be easy. At the same time, when you’re ready to begin a new chapter in your life, an acquisition is one way you can put the company in capable hands, so you can retire in peace or move onto new challenges.
Finding an M&A partner to work with you throughout the selling process is a good idea because an HVAC and plumbing M&A expert will help you find the right buyer and negotiate sale terms.
You'll find numerous M&A firms looking to partner with you, but following a few tips makes it more likely you'll end up happy with your decision.
Here's a look at five best practices for choosing an M&A consulting firm.
1. Look for industry expertise One of the best things you can look for when evaluating M&A consulting firms is expertise in your industry. A firm with industry knowledge will have more insight when conducting valuations, financial analysis, and research to help you get to better outcomes.
An M&A advisor that focuses on one or two industries is also more likely to have contacts within that industry who they can leverage to identify potential buyers. Overall, it makes sense to go with a partner who knows how your business works and what it's worth, because that will help you maximize the value you receive when selling.
2. Consider a boutique firm Another solid tip when looking for an M&A partner is seeking a boutique firm. When running a small business, you're a small fish in the grand scheme of things. While your business is valuable to you and will probably become a valuable asset for your buyer, too, there isn't enough money involved for a national-brand M&A firm to pay close attention to you.
While these large firms might take you on as a client, you can't trust that they'll give you their full attention because they'll be busy working on large-scale mergers and acquisitions.
A boutique M&A firm is more likely to work one-on-one with you than treat you as an afterthought.
3. Ask who will handle your account No matter what size of M&A firm you go with, ask who will be handling your account. You don't want to end up with a junior member without industry experience working on your sale because you'll likely lose out on value.
Major firms will put a junior member on your sale if your operations are under $50 million. Your company isn't a big deal for them, so they won't prioritize your sale. On the other hand, a boutique is more likely to put a principal on the job because your business means more to them.
Always ask who you'll be working with from the outset to ensure you have a seasoned professional assisting with the sale.
4. Seek end-to-end assistance Another thing you'll want to ask is whether your chosen M&A firm provides end-to-end assistance on your sale.
Look for a partner that starts with a business consultation where they'll discuss your goals and go over your financials. From there, they should make sure they understand your business and its culture before creating marketing materials to show to potential buyers.
The firm you choose might also tap into their network of buyers, screen interested parties, negotiate the deal, and assist with closing the transaction.
If your M&A partner isn't with you from the start until the sale is closed, you could end up needing to hire additional help at other stages in the process. In the end, it's far easier to find a firm that will help you every step of the way to selling your plumbing or HVAC company than bringing in new service providers to close the deal.
5. Prioritize firms with key contacts As your M&A partner looks for potential buyers, it should leverage its contacts in the industry to help you find a good buyer and make sure you get a profitable deal. Boutique firms might have existing relationships with consolidators and business networks, where they can find potential buyers, and venture capital groups and private equity firms, which could provide funding for these buyers.
Once again, an M&A firm that specializes in the plumbing and HVAC industries is more likely to have contacts interested in a business like yours, which will help streamline the entire process.
Choosing your M&A consultant As you sell your plumbing or HVAC business, you can go in many different directions. You could always put the company on the market yourself or seek out a general M&A firm to assist, but you might end up losing out on significant value.
The other option is to seek the assistance of a reputable M&A firm that specializes in your industry. This step ensures your company is valued fairly and that you have access to a network of potential buyers.
SF&P Advisors is a boutique M&A consultant that focuses on the plumbing and HVAC industries. When you partner with us, you'll receive end-to-end service, a principal will always handle your file, and you'll have access to our extensive network of contacts. Reach out to us for your free business estimate valuation.