A buyer made an offer. They seem trustworthy. Why pay an advisor when the offer is on your desk? In the current very heated M&A market, PSMJ has run into this situation often. Some owners think of cost avoidance and opt to sign and go it alone. But they are probably settling for a price far less than the current market value with a firm who might not actually be the absolute best fit. For those that choose to bring PSMJ to the table, they find that their investment in our services pays for itself many times over, both financially and in terms of finding the best fit in a transaction partner. A return on investment of 3X to 5X is not unusual with some even higher. Our M&A advisory practice has dozens of clients in the last few years who will happily attest to this.
How do we do this? If the Letter of Intent (LOI) is signed, why complicate things with an advisor now? Because this is where deals are won—or value is left on the table.
At the LOI stage, most A/E firm sellers think the hard part is over. In reality, it’s only just begun. The LOI is a framework, not a final agreement. From diligence to definitive documents, each next step has key impacts on the outcome of the deal, including value, proceeds, and the very nature of the firm after the deal is closed.
The best buyers and the right match will work with you in good faith, but they will not and cannot be expected to deliver the most beneficial nuances of the deal on your behalf.
Whether it’s negotiating major items of significance in the purchase agreement or managing the process with a large shareholder group, our advisory team has stepped into situations like this and provided significant value with our exceptional deal expertise time and again.
Each of the items below comes directly from deals that PSMJ has stepped into at or after the signing of an LOI.
Here are 10 critical reasons to bring an M&A advisor to the table even after an LOI is in hand:
- Clarifying Deal Terms Hidden in Plain Sight for the LOI in Hand
LOI deal terms should be precise and include clear language addressing each consideration for the deal that will impact you and your business. An advisor ensures that what you think you agreed to is actually what’s being said—and locks in the right terms before it’s too late.
- Already Signed? This is Where Real Expertise Comes Out
Many buyers present and operate on an LOI that may be missing critical points that directly impact valuation, outcomes for your business, and your proceeds. Only an experienced advisor knows how to navigate these potholes in a signed LOI to support a fair outcome for you without committing the cardinal sin of renegotiating the LOI. For example, our advisors are masters of identifying when diligence has revealed untapped upside, and how to ensure that value is delivered within the framework and fairway of the LOI.
- Structuring for After-Tax Proceeds
It’s not what you sell for—it’s what you keep. Advisors (working with your CPA or tax attorney) can propose structures that maximize your after-tax proceeds. LOIs rarely spell this out, leaving you vulnerable to painful surprises.
- Managing and Protecting Timelines
Deals fall apart from fatigue or slow execution. Advisors bring discipline, drive timelines, and coordinate with third parties like the CPA or Legal team to keep things moving efficiently through diligence, financing, and closing.
- Leveling the Playing Field
Your buyer likely has run many prior deals or is utilizing a team of advisors. You’re going up against seasoned dealmakers. Without an advisor, you’re negotiating at a disadvantage in a game where you don’t know the rules. Only an advisor will be able to negotiate to meet your goals.
- Injecting Leverage
If you proceed alone with a single buyer even if you have met with one or two others, you are still operating in a vacuum. Without exposure to the current market, you cannot know what your true value is. Any LOI is best positioned for you as the result of a thorough and competitive process that introduces the right buyers.
Even without actually running that process, the best advisor knows right away whether an offer matches or reflects the benefits of that competitive process, and how to make sure the most competitive offers are fair to both you and the buyer.
PSMJ has had several deals where a seller brought us an LOI that we quickly identified as below market. The simple act of signing up with one of our advisors in each case yielded an increased valuation almost instantly for the seller to bring their offer closer in line with market value. This is the reality of our market knowledge and is just the starting point of how an M&A advisor delivers value.
- Avoiding Post-Closing Regret
Sellers without representation often accept terms they later regret—like working longer than expected, restrictive non-competes, or misaligned earnouts. Advisors know how to surface and resolve these pitfalls before the final signing.
- Navigating Information Request Minefields
Before signing an LOI, buyers will request information about your financials, client concentration, backlog, and more. They have a reasonable need to know information to structure their deal, but they also pose a certain degree of risk as prospective competitors if that deal falls apart. An M&A advisor knows what requests are appropriate at every stage, and when certain items should be revealed. Peel back the onion slowly.
During the diligence period, there is no such thing as “catch me if you can”, so it’s always best to provide clear information that meets their needs and is an accurate representation of your firm.
- Bridging Gaps Between Lawyers and Reality
Lawyers protect you, but they don’t always drive deals forward. Advisors help translate business goals into legal terms and vice versa—ensuring your legal team isn’t operating in a vacuum, and that the deal is moving forward.
- Keeping Emotions in Check
Selling a firm is emotional. An M&A advisor brings objectivity, helps you separate the personal from the practical, and serves as a buffer when negotiations get tough—so the deal stays alive and professional. This is especially true when there are large or complex shareholder groups involved. The advisory team at PSMJ has exceptional expertise in managing and navigating the interests of each and every shareholder.
The Bottom Line:
Just because you have an LOI doesn’t mean the deal is done—it means that the framework of the deal is largely locked in place. Get a professional opinion before you sign. If you have already signed without that input, then you will need an M&A Advisor’s deal expertise more than ever to make sure the deal can make it to the finish line with the best possible outcome achieved.
Have you received a deal in hand? Are you curious about meeting potential transaction partners? Or are you just curious about the current M&A market and would like to get a pulse check? Feel free to leave us a comment below, or click the button to connect with us directly. All comments are reviewed by PSMJ's Growth and Transition Advisory Team and are not shared publicly unless you request them to be.
Whether you have a buyer at the table, are just beginning to consider a transition—or are simply curious about where your firm stands—connect with us via the link below. We’ll help you understand the market, explore your options, and position your firm to achieve the outcome you deserve.
*This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, or financial advice.