Quick answer: A sell-side M&A advisor represents the owner: preparing the company, finding buyers, running a competitive process and negotiating terms through closing. A buy-side advisor represents the acquirer: defining targets, approaching owners, valuing the business, structuring an offer and managing diligence. Their goals are opposite, so one advisor should not represent both sides of a deal.
Key points
- Sell-side advisory aims to maximize price and certainty for the owner by creating competition among qualified buyers.
- Buy-side advisory aims to find the right target at a price and structure the buyer can justify, and to avoid inheriting problems.
- A valuation is useful on either side. It gives the owner a view of price before going to market, and it gives the buyer a test of what a target is worth to it.
- Fees often combine a monthly or upfront component with a success fee at closing. Structures vary, so compare what each covers.
Two sides of the same transaction
Every deal has a seller and a buyer, and each can have its own professional advisor. The work is different because the objectives are different. The seller wants the best price and terms and the highest certainty of closing. The buyer wants a business it can justify buying at a price it can afford and without surprises. An advisor who understands the two roles can help whichever side the client sits on, but never both in one deal.
What a sell-side advisor does
A sell-side engagement runs from preparation to closing. The usual phases are these.
- Valuation and preparation. Establishing what the business is worth, normalizing earnings, identifying the issues a buyer will raise and deciding what to fix before going to market. The overview of transactional valuation explains how the first step works.
- Marketing materials. A short anonymous summary, often called a teaser, to introduce the opportunity without revealing the company’s name, and a confidential information memorandum with the full story for buyers who sign a confidentiality agreement. The comparison of a valuation report and a CIM explains how they differ.
- Buyer identification and outreach. Building a list of strategic and financial buyers, contacting them in a controlled sequence and managing the flow of information.
- Process management. Collecting indications of interest, arranging management meetings, setting deadlines and keeping several parties competing at the same time.
- Negotiation. Comparing offers on more than price, negotiating a letter of intent and the definitive agreement, and working with the owner’s attorney and tax advisor.
- Diligence and closing. Organizing the data room, coordinating responses to buyer questions and keeping the transaction moving to closing.
The sale process guide describes these steps from the owner’s side of the table.
What a buy-side advisor does
A buy-side engagement starts from the buyer’s strategy and ends when the acquisition closes or the buyer decides not to proceed.
- Defining criteria. Translating the buyer’s goals into the characteristics of a good target: size, industry, geography, customer profile and financial performance.
- Finding targets. Identifying companies that meet the criteria, including the large number that are not formally for sale, and approaching their owners.
- Valuation and structure. Assessing what each target is worth to the buyer, including synergy, and designing an offer that fits the buyer’s financing and risk tolerance.
- Diligence coordination. Directing the financial, legal and operational review, and the quality of earnings work that tests the seller’s numbers.
- Negotiation and closing. Negotiating price, terms and the purchase agreement and managing the process to completion.
The buy-side process guide covers the acquirer’s path in more detail.
How the two roles compare
| Sell-side advisory | Buy-side advisory | |
|---|---|---|
| Client | The owner or shareholders selling | The company or investor acquiring |
| Core objective | Price, terms and certainty of closing | A fit at a justifiable price with controlled risk |
| First step | Understand value and prepare the business | Define the acquisition criteria |
| Role in finding counterparties | Approach and manage many buyers | Identify and approach target owners |
| Valuation question | What would buyers pay, and who pays most | What is this target worth to us, and what should we offer |
| Information flow | Controls what buyers see and when | Tests the seller’s claims through diligence |
| Success measure | Closing at the best achievable terms | Closing at a price that meets the buyer’s return |
Where valuation fits on each side
A transactional valuation is useful at the start of either engagement. For a seller, it shows the range and the drivers before any buyer sees the business. For a buyer, it tests what a target is worth to that buyer specifically, with and without synergies, so the offer does not exceed what the numbers support. The same analysis can also reveal when it is better not to transact. The strategic versus financial buyer comparison shows how buyer perspective changes value.
At The Impetus Group, the valuation is a standalone engagement with its own scope and fee, and the sell-side and buy-side advisory services are separate. That structure lets a client use the valuation without committing to a process.
Choosing an advisor
Several questions help separate advisors who fit your situation from those who do not.
- Who is the typical client? The size and type of company an advisor usually serves affects the buyers it can reach.
- Who will do the work? Ask which individuals will be involved day to day, not just who presents the proposal.
- How is the process run? A clear plan for outreach, timing and information control matters more than promises about price.
- What does the fee cover, and what happens if no deal is done? Understand the upfront component, the success fee and any expenses.
- How are conflicts handled? Ask about relationships with potential buyers and whether the advisor ever represents both sides.
For a comparison with a different kind of intermediary, read M&A advisor versus business broker.
Frequently asked questions
When should an owner hire a sell-side advisor?
Ideally well before the sale, because preparation takes time and affects price. The strongest position comes from understanding value and fixing issues first, then going to market when results and timing line up. An owner who has received an unsolicited offer should consider advice before responding.
Can the same advisor represent both buyer and seller?
It creates a conflict, because each side wants the opposite outcome on price and terms. Advisors who work on both sides of the market represent one party in any given deal, and they should disclose any relationship with the other party. Ask about this directly.
How are M&A advisors paid?
Fee structures vary. Many combine an upfront or monthly fee during the process with a success fee paid at closing that is tied to the value of the transaction. Ask what is included, what happens if the process ends without a deal, and how the success fee is calculated.
Do I need an advisor to buy a company?
Not legally. A buy-side advisor can widen the search to companies that are not for sale, bring valuation discipline and manage the process while management continues to run the existing business. It is most useful when the buyer lacks the time or the experience to do these things alone.
Thinking about a sale or an acquisition?
The Impetus Group provides sell-side and buy-side M&A advisory, from preparation and buyer outreach to negotiation and closing. A transactional valuation is often the first step, scoped and priced separately.
Related guides
- M&A Advisor vs. Business Broker: Which Fits Your Business?: M&A advisors and business brokers both help sell companies, but they usually serve different sizes of business and buyers. Compare the two and see which fits.
- How an M&A Sale Process Works: Stages From Preparation to Closing: A step-by-step view of a sell-side M&A process: preparation, marketing, bids, the letter of intent, diligence, the purchase agreement and closing.
- How a Buy-Side Acquisition Process Works: From Strategy to Integration: The stages of acquiring a company: criteria and sourcing, outreach, valuation, the letter of intent, diligence, financing, the purchase agreement and integration.
- Strategic vs. Financial Buyers: Who Pays More and Why: Strategic buyers pay for synergies and fit. Financial buyers pay for cash flow and returns. See how each values a company and which is likely to pay more.
- Transactional Valuation: What It Is and How It Works: A transactional valuation estimates what a strategic or financial buyer would pay for a business. Learn what goes into one and how it differs from an appraisal.
- Transactional Valuation vs. Appraisal: Which Do You Need?: A transactional valuation estimates what a buyer would pay. An appraisal estimates value under a legal or tax standard. See how they differ and which one fits.
This guide is general education. It is not a valuation opinion, appraisal, investment advice, or legal or tax advice. How these guides are made.