An M&A investment bank runs a formal sale process: a buyer list built by hand, a document that withstands institutional diligence, and a bidding timetable everyone is held to. For a private seller the question is not whether that is valuable but whether your business is large enough for the minimum fee to make sense.
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What the mandate includes
Preparation and normalisation of the earnings, the information document, buyer identification and approach, offer management to a deadline, and running diligence and negotiation through to closing. Legal drafting and tax structuring are separate and billed by others.
The minimum decides the fit
Banks state minimum fees rather than minimum revenues. Where the minimum is a large share of your likely price, the process is the wrong product and a boutique or a main street broker will serve you better. Ask for the minimum at the first meeting, in writing.
Testing the team
Who by name will run the process, how many live mandates they carry, how many buyers will be approached, and how many of those the team has closed with in the last two years. Then ask what happens if a buy side client of the same bank bids for your business.
What the process actually looks like
Four to eight weeks of preparation before anyone is contacted, then a phased approach to buyers with a deadline for first round indications, management meetings with the shortlist, a second round with final bids, and then exclusivity, diligence and drafting. The value of the shape is that offers arrive together and can be compared, which is exactly what does not happen when buyers are approached one at a time.
Questions people ask about M&A investment bank
Is a bank better than a boutique?
Only where its buyer list is better for your business. Boutiques often have deeper sector relationships in a narrow field.
What does the retainer pay for?
The preparation work before any buyer is contacted. Ask whether it is credited against the success fee at closing.
Do banks work with small companies?
Some have lower middle market groups. The minimum fee is the honest test of whether you are in their market.