When a business owner decides to sell their company or an investor is considering an acquisition, the first big decision isn't who to buy from or who to sell to — it's who to hire to guide you through the process. The difference between the right advisor and one who isn't a good fit can translate into a 20%–30% difference in the final price, months added to the timeline, and even deals that fall through because of avoidable mistakes.
If you already know that you need an M&A advisor, this article helps you make the next decision: how to choose the right one. Start with the quick test, then dig into the criteria, fees, and questions you should ask before signing the mandate.
When to bring in an advisor (hint: before you have an offer)
One of the most common mistakes we see is hiring an advisor when there's already an offer on the table. At that point, much of the value they can add has already been lost:
- They haven't been able to prepare the company to present itself at its best
- They haven't been able to build a universe of alternative buyers
- They haven't been able to structure a competitive process that maximizes the price
- They're relegated to the role of one-off negotiator, not architect of the process
The ideal time to bring in an advisor is 6 to 12 months before you want to close the deal. This leaves time to carry out a rigorous valuation, prepare the teaser, build the information memorandum, identify and contact potential buyers, and handle negotiation timelines with room to spare.
8 selection criteria that really matter
Once you've identified your profile, there are eight specific factors that separate a good advisor from a mediocre one within that segment. Assess each candidate on these points:
1. Genuine sector specialization. "We cover every sector" doesn't cut it. Ask how many deals they've closed in your specific sector in the last 24 months. A boutique with 8 closed deals in your sector is infinitely more useful than a large bank with 200 deals across different sectors.
2. Track record of closed deals (not pitched ones). Some advisors have an impressive list of signed mandates but a low conversion rate to closed deals. Ask for their closing rate and their last 5–10 closed deals with verifiable references.
3. Network of active buyers. This is especially important on the sell side. How many buyers in your sector have a direct relationship with the advisory team? An advisor with 20 active contacts at family offices or specialized funds in your sector is worth more than one with 200 generic contacts.
4. The specific team assigned to your deal. The partner signs the contract, but the team does the day-to-day work. Ask to know who will run your deal: senior, junior, analyst. Confirm that the partner will be present at key moments (kickoff, presentation to buyers, final negotiation).
5. Conflicts of interest. Is the advisor representing your competitors at the same time? Do they have open mandates with potential buyers on your radar? This must be disclosed in writing in the mandate.
6. Bandwidth. Ask how many active mandates the team is handling right now. A team with 8 simultaneous mandates has less room to prioritize you than one with 3.
7. Quality of the teaser and IM. Ask to see anonymized examples of teasers and information memorandums they've prepared for other clients. If the documents are generic or poorly structured, steer clear.
8. Personal chemistry. You'll be working side by side with this team for 6–12 months, through high-pressure moments and major decisions. If the first meeting doesn't flow, the process won't either.
Fees: how they're structured and what you can negotiate
The fee structure of an M&A advisor in Spain typically combines three components:
Retainer fee (fixed monthly fee). It covers the advisor's operating costs during the process. Typical ranges in the Spanish market:
- Bulge-bracket banks (Goldman, JP Morgan, Morgan Stanley): €30,000–€100,000/month
- Mid-market boutiques (Alantra, Arcano, DC Advisory, Big 4): €8,000–€25,000/month
- Specialized boutiques and micro-advisors: €2,000–€8,000/month
Success fee. The bulk of the compensation. It's paid at closing. Common structures:
- Fixed percentage of the transaction value: 1%–2% in large deals (>€50M), 2%–4% in the mid-market, 4%–6% in small deals (<€10M)
- Modified Lehman scale: decreasing percentages by tier
- Minimum fixed amount + percentage: protects the advisor in small deals
Sliding scale or incentive for exceeding the valuation. A sophisticated structure in which the success fee percentage increases if the closing price exceeds a pre-agreed threshold. For example: 3% up to €10M, 5% above that. This clause aligns interests very well and you should always consider it when negotiating a mandate.
What you can negotiate:
- Crediting the retainer against the success fee at closing (partially or fully)
- A cap on the total retainer (especially in deals that drag on)
- The exclusivity clause and its duration
- The tail clause (what happens if the deal closes with a buyer introduced by the advisor, but months after the mandate ends)
- Expense reimbursement: define what is and isn't reimbursable
The mandate: what isn't in the contract but matters
When you sign the mandate, read carefully not only what's written, but also what isn't:
- What's the realistic timeline? Ask for a written milestone plan (not necessarily part of the contract, but documented).
- Who is your single contact? Designate one person on the team as the single point of contact.
- How often are status calls held? Agree on a weekly or biweekly cadence at a minimum.
- How are disagreements over strategy handled? If you want to explore a buyer and the advisor doesn't, who decides?
- What information is shared and when? Define which deliverables you'll receive (list of buyers contacted, offers received, etc.).
Decision: the right advisor, not the best one on the market
The "best advisor" in the abstract doesn't exist — what exists is the right advisor for your specific deal. A five-person boutique specialized in your sector can be an infinitely better choice than a bank with 500 people if your company generates €8M in revenue in a specific niche. And vice versa: a generalist broker won't be able to give you the international reach you need if you're selling a company with the potential to be acquired by an American fund.
If you want to move forward with your deal, at Deale we can help you connect with the right advisors and buyers for your company.
