Most likely you know who insurance, financial broker, and real estate agent are. But not everyone knows who an M&A broker is, what he does, and what role he plays in the ready-made business market. Here is more about it.
M&A broker: who is it?
The M&A broker is a legal or natural person who acts as an intermediary in transactions for the sale of a ready-made business, works exclusively in the interests of each of the parties – the seller and the buyer. In other words, it can be called a mediator. Here it is not enough to have just experience in sales, you need to understand various areas of business, legal issues and be able to correctly assess the object, tangible and intangible assets. A specialist who helps the parties consider the terms of the agreement from all angles may take on different roles and different styles of counseling, depending on many factors.
The main task of a business broker is to conduct the M&A transaction between the buyer and the owner on the most transparent and favorable terms for both parties, to ensure legal purity, security, and to prepare a transaction that is economically beneficial for each of the parties.
Let`s analyze what is included in the work of a broker with a client when buying a business:
- Professional selection of ready-made business objects, based on the needs of the client;
- Check the business and make sure that the object corresponds to the declared value;
- Conduct an assessment of tangible and intangible assets;
- Give your professional and independent assessment of the object;
- Properly negotiate with the owner of the business and agree on a reduction in cost;
- Agree with the owner on the introduction to all processes for the first time;
- Legal support of the purchase and sale transaction;
- Ensuring the security and guarantee of the purchase and sale transaction.
- The mediator helps the parties to negotiate in such a way as to conclude the most mutually beneficial agreement. top managers or members of companies are often unable to soberly assess the situation and make the necessary compromise decision. In such cases, the help of mediators is extremely important for the successful completion of the M&A agreement. Their task is to assist in resolving conflicts that have arisen and to obtain an agreed solution from the parties.
- At the stage of working with shareholders, agreements, or partnership agreements, the main task of the mediator is to conclude such an agreement, which will take into account and reflect the interests and needs of contractors. In addition, the mediator ensures that the document takes into account and resolves the concerns of counterparties related to possible obstacles to the implementation of agreements, and provides ways to resolve disputes.
- At the stage of agreement preparation, mediation is an effective measure of conflict prevention in the process of agreement implementation. Awareness of the parties to the agreement of the fact that in their situation it is possible (and necessary) to conduct a dialogue prevents the escalation of conflicts. In the case of the involvement of competent, professional assistance of the M&A broker the differences are overcome by the joint efforts of the parties themselves.
Basic tasks of the M&A broker
There are the most typical features of a neutral third party, which are listed below: