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Merging with Another Business - Questions for Intermediaries

If you are thinking of merging your business with another, chances are you'll want to consult with an intermediary for the process. An intermediary acts as a "middle person," representing either the buyer or the seller, and can help structure and negotiate the deal.

Is an intermediary a lawyer? No. Is an intermediary an accountant? No. An experienced attorney will handle all the details of the merger agreement, while the accountants perform comprehensive financial analysis. Simply put, an intermediary helps execute the merger and acquisitions process.

Choosing the right intermediary is crucial to the success of your transaction. The following list of questions can help you determine if the intermediary is qualified to represent you in this undertaking

Experience, Knowledge, and Professional Standards

  • What is the intermediary's education and experience?
  • What type of companies has the intermediary and his or her firm worked with?
  • What size and type of transactions have this intermediary and his or her firm completed?
  • What has the intermediary's track record been on other transactions?
  • Can the intermediary and the firm provide references?
  • Is the intermediary licensed? If so, which licenses and in what states?
  • Have there been any regulatory complaints or administrative actions taken against the intermediary or other members of the intermediary's firm?
  • Are the intermediary and/or the firm members of any industry group which requires its members to a follow a code of professional conduct?

Firm Quality

  • How many intermediaries does the firm employ?
  • How long have these intermediaries been with the firm?
  • What are the backgrounds of key members in the firm?
  • Do members hold any special designations?
  • How is intermediary recruiting done?
  • How many members of the firm will be working on your project?
  • How will information be communicated with personnel working on your merger?

Capabilities and Services

  • What types of investors does the firm track in its database? Do they fit with the type of investors that would be interested in your proposal?
  • How much and what sort of information does the firm keep on potential investors?
  • How often is the investor database updated?
  • Does the firm participate in industry networks?
  • Is the firm's investor base limited by industry, size, or geography, and are the limitations in keeping with your needs?
  • Will the firm provide you with sample offering prospectuses and memoranda?
  • Can the intermediary provide guidance on terms, pricing, and how to structure the deal?
  • Can and will the intermediary be involved throughout the entire negotiation, and to what extent?

Negotiation and Confidentiality

  • Get a sense of the intermediary's listening skills and ability to ask appropriate questions.
  • Does the intermediary seem genuinely interested?
  • Does the intermediary seem able to adapt to change and think on his or her feet?
  • Does the intermediary seem to take an open and creative approach to solving problems, or does his or her approach seem more rigid?
  • What approaches does the intermediary prefer in arranging a deal? Are you comfortable with that style?
  • Does the firm require potential investors to sign a confidentiality agreement? What are the key provisions?
  • How does the firm guard against releasing sensitive or confidential information?
  • Does the intermediary seem to take confidentiality seriously?

Next Steps

If you are considering working with my intermediary, make sure you hire one that will help you make the best possible deal. If you have legal questions, speak to a qualified business and commercial law attorney in your area.

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