The Current State of M&A Advisory Fees
In partnership with Axial, DealCircle, and Divestopedia, Firmex’s 7th annual M&A Fee Guide is an authoritative source on M&A fees for sell-side engagements in the middle market..
Using data gathered from a survey of midmarket dealmakers, the guide highlights key points of interest on M&A fees, shared across geographies and deal sizes. The findings in the M&A Fee Guide are also presented with featured commentary from M&A experts at Axial and Divestopedia, sharing their views on how the data matches up with their professional experience.
Better Conversations on M&A Fees
In reading the guide, M&A advisors and business owners will learn valuable insights on the expectations, negotiations, structuring, and associated practices surrounding M&A fees.
Key Highlights from the M&A Fee Guide 2023-2024
- Nearly half of all middle market merger advisors say they raised fee levels in 2023, prompted mainly by rising costs and a more difficult deal-making environment.
- Many firms have also modified their fee structure to emphasize recurring engagement fees to mitigate the risk of deals that take a long time to complete or never close.
- The growing use of earn-outs and complex deal structures is prompting firms to redefine how they calculate and collect success fees.
- Smaller firms have been able to hold their fee revenue steady and, for many, increase it even as business at larger investment banks continues to fall off.
- One-third of the firms increased their profits in 2023. Those that increased fee levels were twice as likely to grow profits than those that didn’t.