Merger and Acquisition Firm or Investment Bank?


Merger and acquisition advisory firms like CGK work with business owners who are looking to sell. The role of the firm is to connect the owner with those who are interested in buying a similar type of business. During this process, the firm may take on numerous tasks including the following:

Determine the Company’s Value

First and foremost, the firm determines a value for the business and creates a confidential information memorandum or pitch book to present to potential buyers. After this material has been gathered, the firm determines which investors would be most interested in a business of this type and presents the opportunity to them.

Negotiate the Purchase

In the event a potential buyer wishes to place an offer on the business, the merger and acquisition advisory firm negotiates the purchase and sale agreement on behalf of the seller and any other agreements related to the transaction. Assistance with due diligence is included in CGK’s services, and we handles all issues that arise during the process.

How does this differ from an Investment Bank?

An investment bank offers additional services. If a company wishes to issue and place stock, for example, they would turn to an investment bank. If a corporation opts to issue securities, they turn to the bank to act as the agent or underwriter. Once securities have been issued, the investment bank takes on the task of maintaining a market for these securities, and they likewise provide advisory services to investors.

Which option should you select?

Business owners often wonder if they should go with a merger and acquisition advisory firm when they have a business for sale, or if an investment bank would be the better option. The value of the business is of great help in determining which is the right selection.

A small business broker firm works best for smaller clients, with a business valued under $1 million. An individual with a business valued between $1 million and $10 million would benefit from the expertise of an M&A advisory firm, such as CGK, as we specialize in transactions of companies in this price range. Bulge bracket investment banks help those who have a business valued at more than $100-500 million. However, there is an exception. When a company is looking to conduct several small transactions as opposed to one large one, such as when they are employing a roll-up strategy, a business broker or M&A advisory is the best solution.

Thinking about selling? Give us a call or email us today for a free consultation, or visit our website to learn more.

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