Why Use an Investment Banker?

Commentary by Jim Zipursky, Chairman & CEO of Corporate Finance Associates Worldwide, a Strategic M&A Partner of TSG

Business owners and executives, whether buyers and sellers, often ask: why should I use an Investment Banker (IB) when I can do this myself? What value do IBs really add to an M&A process? When it comes to M&A, the stakes are high. You are not just moving numbers around; you are reshaping your business’s future.

Whether you are a seasoned CEO or a first-time business seller or buyer, navigating the complex world of M&A can feel like trying to find your way out of a maze blindfolded. Of course, I am biased as an Investment Banker for almost 35 years, but the benefits of using an Investment Banker for M&A advisory are myriad.

Expertise and Experience Matter

First off, we IBs live and breathe M&A. IBs have the expertise you might not find in-house. We have spent years mastering the art of deal-making, from valuation techniques to understanding market trends. IBs know what a fair price looks like, how to structure a deal, and the ins and outs of negotiation. Think of an IB as your personal GPS guiding you through the M&A process. We do this type of work every day and have encountered almost every obstacle; while this may be new for you, it is “old hat” for your IB.

Access to a Vast Network and Resources

One of the most significant advantages of engaging an IB is tapping into our extensive network of resources. Experienced IBs are connected to a plethora of potential buyers, sellers, and other key players in the payments M&A industry. This can be a huge advantage, especially if you seek a strategic partnership or want to maximize the number of interested parties in your process.

Market Value Expertise

You might think you know what your company is worth, but have you considered all the variables? IBs are skilled in the art of market valuation and marketability of businesses. They know how to assess a company’s worth using various methods, including comparable company analysis and discounted cash flow models. This is crucial when it comes to negotiating the best deal. Overvalue your business, and you risk chasing away the right buyer; undervalue your business, and you risk taking too low an offer. An experienced IB will not let you make the mistake of over or under-valuing your business.

Experts at the Process

M&A transactions can be time-consuming and overwhelming. We estimate our team collectively invests more than 1,200 hours per M&A engagement. You already have one full-time job running your business…do you want another job running an M&A process? Think of your IB as your outsourced M&A resource, acting as your project manager, ensuring everything runs smoothly and on time. IBs coordinate between different parties, manage timelines, and keep communication lines open. This lets you focus on what you do best—running your business—while we handle the nitty-gritty details.

Negotiation Expertise

Negotiation can make or break an M&A deal. Your IB knows the tactics that work and the pitfalls to avoid. With their experience, IBs can help you get the best deal possible and focus on getting it done. This can be especially valuable where emotions can cloud judgment. Your IB keeps things objective and ensures you get the deal you want without leaving money on the table.

Confidentiality and Professionalism

Confidentiality is king to IBs. Your IB manages and maintains confidentiality in the process, which not only protects your business reputation but also preserves the integrity of the deal.

Your Payments Partner in Success

Now more than ever, it is important to understand a portfolio’s true value and the factors that affect it.

Through Value Optimization, TSG combines its payments industry expertise and analytics with CFA’s global investment banking services to guide companies in maximizing their selling pricing.

Learn more and contact us today to start the conversation.