What GCs Should Ask Bankers When They Have to Sell the CompanySeptember 22, 2015 – In The News
David A. Jaffe was featured in the Law.com article “What GCs Should Ask Bankers When They Have to Sell the Company." While the full text can be found in the September 22, 2015, issue of Law.com, a synopsis is noted below.
According to David A. Jaffe, “the influx of talented deal professionals into the lower middle market over the last decade has radically changed this market segment.” He goes on to state that, “with more options, comes more power on the client side. It is possible now more than ever for sellers to find highly competent advisors to represent them in a sale process.” David continues by offering information for companies in the process of selling to consider before choosing an investment bank.“Recent experience is more relevant than dated transactions, and since many industries move in 18-24 month cycles, it’s particularly important to know what’s been on the books lately,” says Jaffe. The average deal size for sell-side mergers and acquisitions can also be a considerable factor. He goes on to state that, “as a seller, you want to understand the importance of your deal relative to the banker’s backlog of transactions.”
It is also important to consider the percentage of sell-side transactions that have closed. According to David, “the opportunity cost of a failed transaction in terms of attention and resources diverted from the operation of the business is considerable, to say nothing of reputational damage.” This can help determine if deals have been mishandled by bankers in the past which can be crucial to the selection process.