Your business broker / advisor is making a LOT more on your deal than you think.
If you’ve hired a good business broker / investment bank you’re paying through the nose for their advice. You’re paying a retainer or advice fees and you’ll pay a hefty commission when you sell. But that’s only part of the story.
BusinessInsider provide an example where the fee derived from the actual deal advice was dwarfed by the fees that came from working on loans and bonds to fund the acquisition, and revenues from hedging and the like.
“The M&A fee was the smallest part of our revenues from a transaction,” Meissner said. “Financing, derisking, working with our colleagues on global markets in terms of hedging and liability management, all those things together added up to six times the M&A fee.”