The Current State of M&A Advisory Fees
In partnership with Langcliffe International, Firmex’s 6th annual M&A Fee Guide 2022-2023 is the authoritative source on M&A fees for sell-side engagements in the middle market. The guide enables M&A advisors and their clients to have more transparent conversations on advisory fees and how they’re charged, to better align expectations for compensation on the deal.
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 Langcliffe International, 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 surprising insights on the expectations, negotiations, structuring, and associated practices surrounding M&A fees. The guide serves as a reference point on what would otherwise be a complex and highly variable topic—the pricing of M&A fees.
Key Highlights from the M&A Fee Guide 2022-23
- A majority of middle-market European merger advisors said they kept their fee levels the same in 2022 as in 2021 for deals of similar size and complexity.
- About two-fifths of the firms raised success fees, work fees, or both.
- More than half of the advisors said their revenue from M&A fees would be higher in 2022 than in 2021.
- Most firms said they would be about as profitable in 2022 as in 2021. Of the rest, more said profitability increased than said it declined.
- The number of firms that don’t charge a retainer or work fee in addition to a success fee increased to 13% from 8% last year.
- Three-quarters of firms said there was no change in the pressure to cut fees in 2022. Only 15% of firms said the pressure increased.
