Marcuson-Beck & Associates M&A Advisors LLC “MBA” offers two primary services, Business Brokering services to sellers and M&A Advisory services to firms looking to grow through M&A.
The term “Business Broker” is just a phrase, as are “M&A Advisor” and “Investment Banker,” but the term “Business Broker” is characteristically used to refer to brokers representing practices valued under $1.5 million. MBA’s Business Brokers generally serve buyers and sellers of small accounting practices located in a specific geographic area. Examples are small “micro-firms” that provide tax preparation, accounting, audit, compilations, reviews, part time CFO consulting, bookkeeping, payroll and other services to small business owners.
MBA’s Business Brokers represent sole practitioners or multi partner firms that still operate as sole practitioners. Our micro-firm clients generally don’t exceed $1 mm per partner and individual client relationships are managed by the owner/partners. Client lists, also referred to as a “book” sell on average for 1 x annual gross revenue.
The most common buyers for micro-firms are individuals or firms of similar size that are nearby, and the buyer will typically work in the business or absorb the seller and employees into their offices. Buyers of micro-firms often own their own practice and have been involved in the purchase or sale of a practice before, and tend to have first-hand knowledge of business transactions, financing options, etc.
“M&A Advisor” is a term generally used to refer to consultants that represent firms valued greater than $1.5 million. Firms in this space may be multi-location, large independents, regional or national firms with regional, national or international clientele.
Firms represented by Marcuson-Beck’s M&A Advisors generally have a separation of ownership and management and will almost always have some middle-management personnel.
Firms represented by MBA M&A Advisors may be individuals (at least on the smaller size deals), but are more often large independents, regional or national firms. Our average client grosses $20 million in annual revenues.
Firms represented by MBA M&A Advisors will generally be acquiring or seeking merger targets as part of a multi-year growth strategy for expansion. MBA M&A Advisors typically lead multi-year engagements and manage multiple transactions per client as part of a plan to add complimenting services, establish new market locations, grow existing offices and acquire top talent.
Firms cultivated by MBA M&A Advisors have greater potential for being a strong match to our client’s growth plan ensuring the highest ROI. MBA M&A Advisors are responsible for adding millions of dollars to our client’s bottom line each year.
MBA M&A Advisor-represented firms tend to be well-established, stable and experienced in mergers and acquisitions. As such, our clients can be pretty savvy buyers. To that end, sellers should engage representation that has commensurate M&A experience.
MBA’s Business Brokers generally provide services in a manner similar to Real Estate Brokers, listing practices for sale and advertising them to our registered buyers. However, we do not broker real property transactions, we only transact the sale of client lists in states we are permitted to do business. We cultivate buyers within our network and rely very little on outside web postings. With 100,000+ CPA contacts/emails in our registry, we directly prospect to select buyer candidates. Our Business Brokers spend less time per deal as they are typically one-off transactions when compared to the time the M&A Advisor will spend on a multi-year engagement.
Our M&A Advisors operate more like consultants and members of your team. In representation of our client, we conduct targeted searches to sellers and/or merger targets who demonstrate interest in opportunities of the type being represented. We provide leadership, project management, industry experience and advisory services throughout the M&A process ensuring the growth objectives of our client are achieved.
Our M&A Advisors have fewer engagements than our Business Brokers and generally spend considerably more time working for just a handful of long term clients.
Our Business Brokers and M&A Advisors charge a success fee of up to 15 percent of the transaction value. Back-end or “success fees” for M&A deals vary widely depending on the size and complexity of the transaction, ranging from 2 percent for deals above $5 million to 15 percent for deals under $400,000.
The “Business Broker or M&A Advisor” decision is largely determined by the type service you need. If you are selling your practice, you’ll want to work with one of our business brokers. If you’re looking grow your firm through M&A, you’ll need the services of an MBA M&A Advisor.
For more information please call us at (907) 830-3663.