Who are the best M&A advisors for your company?
Ultimately, M&A advisors do two things. They help companies grow through merging with or acquiring other companies. M&A advisors also help business owners formulate exit strategies. While these services appear to be the same regardless of the market, the reality is different intermediaries service different markets. There are a few key aspects to look for when picking an M&A advisor in the middle market. But first, how does Murtha & Murtha Mergers and Acquisitions define the middle market?
We define the middle market as:
- Companies with sales between from $5m to $250m.
- Businesses that are privately held.
- Companies with 10 to 200 employees.
The middle market differs from both the micro-cap and large-cap markets.
The micro-cap market ($500,000-$5,000,000 in sales) is generally handled by intermediaries called “business brokers”. Business brokers work with buyers and sellers similar to the way commercial real estate companies do. Most of the time their “listings” are advertised through a multiple listing service (MLS). Unlike M&A advisors, who most commonly use a financial services agreement (FSA), business brokers work through a listing agreement. Business brokers in the micro-cap world sell their listings through web advertising and networking with other brokers.
Mid-Cap (Middle) Market
The definition of the middle market varies from advising firm to advising firm. On the broad side, the middle market is any business operating with gross sales from $5 million to $1 billion. Murtha & Murtha focuses on the bottom quartile of this group. The $5 to $250 million group includes the majority of the businesses operating in the middle market. Firms working with middle market companies frequently refer to themselves as M&A advisors, financial consultants, and even investment bankers. While most firms use […]