The journey of selling a business demands careful consideration and knowledge. Among the myriad of choices available to sellers, one option particularly worth considering is the decision to work with an advisory firm that belongs to an M&A network with worldwide reach and expertise.
Globalscope Partners is one such network, and I as an M&A advisor chose to join it for a myriad of reasons—all of which offer tangible benefits to the sellers we represent. In this brief overview, I’d like to touch on a few.
A World of Advantages
The world of mergers and acquisitions is where the intricacies of negotiations, market dynamics, and strategic decision-making converge. The scope of such converging forces is one reason why an M&A network like Globalscope can be so important to sellers.
Globalscope member firms employ hundreds of mid-market M&A advisors that bring a wealth of international expertise, industry insights, and a collaborative ethos that are typically unavailable in the mid-market arena.
The key concept in this case is “mid-market.” Most mid-market transactions aren’t large enough to merit the attention of the big M&A advisory firms, so for the most part, sellers in the international mid-market space have largely been on their own.
The Globalscope network, however, levels the playing field between mid-market companies and huge enterprises that want to sell in the international arena. With a global M&A network model, all stakeholders in a middle-market transaction come out ahead.
Market environment
Let’s explore the competitive landscape to gain a deeper understanding of the alternatives available to businesses contemplating a strategic transition—as well as how Globalscope combines the benefits of each specific option.
Traditional Investment Banks
Esteemed for their long-standing presence and global outreach, traditional investment banks offer a wealth of experience. Some sellers, however, may find them less personalized and missing the tailored touch that a more flexible, hands-on partner offers.
Boutique Advisory Firms
Specializing in specific industries or regions, boutique firms provide sellers with targeted expertise. Despite their personalized approach, they often lack the expansive network a worldwide partnership like Globalscope provides.
In fact, when boutique advisory firms collaborate on a deal, a business seller in the mid-market space can actually get the best of both worlds. Boutique firms typically focus on one or a few market segments in which they have particular expertise.
In most cases, boutique firms are also more accustomed to working in tandem with sellers who not only have business but personal and family goals to consider as well. Combining mid-market, sector and geographical expertise into a seamless team of advisory professionals offers the seller a much stronger value proposition.
Independent Advisors
Individual advisors also offer close working relationships, but again, the challenge lies in the scale and global reach these advisors can provide. Globalscope’s M&A network, with 55 member firms and 500 investment bankers worldwide, offers sellers a comprehensive and far-reaching approach without hindering the advisor’s independence.
Online Marketplaces
The rise of online platforms has introduced a digital dimension to the M&A landscape, offering streamlining connections between buyers and sellers. But these platforms alone often fail to provide the depth of strategic guidance that sellers need. What’s more, they usually cater to very small businesses.
Regional Players
In specific regions, sellers may prefer an M&A advisory firm with a deep understanding of their local market. While local insights are highly valuable, regional firms typically lack the global expertise needed to optimize cross-border transactions.
The Globalscope M&A network fills in the gap by offering sellers both local and global M&A expertise.
DIY Approaches
The do-it-yourself approach is always an option, and it’s often the preferred one for business sellers who want to maintain a high level of control. But navigating the complexities of M&A transactions independently comes with considerable risks—especially if the company is a larger enterprise with multiple employees, intricate market dynamics, and diverse stakeholders.
It’s true that working with professionals does cost the seller more money at the outset. The benefits, however, far outweigh the risks. What you pay for in professional services is a fraction of what a seller can get back through better terms and a higher sales price.
These benefits are even more tangible when a network of professionals is involved versus one advisor alone. Globalscope’s streamlined approach to working with multiple member firms offers a balanced solution that can minimize costs and maximize the opportunities at hand.
Going Global with (or without) an International M&A Network
Whether a seller chooses to work with an M&A advisor or not, the possibility of an international sale should always be on the table. Selling in the international arena can offer several advantages compared to selling domestically.
Here are some potential benefits every business seller should be aware of when it comes to a cross-border sale.
Market Expansion
Selling internationally allows businesses to tap into new markets and reach a larger customer base, providing opportunities for growth that may not be available in a domestic market alone.
According to a December 2022 article in Forbes, international M&A deals were at an all-time high in 2021, totaling more than $2.1 trillion worth of transactions. This represents roughly 36% of all M&A transactions that year.
In 2022, the cross-border total dropped to around $1.1 trillion, representing around 32% of the global volume. Although the dollar figure declined significantly, the cross-border percentage of global versus domestic M&A activity stayed relatively the same.
The growth benefits that come with expanding internationally are one of the main reasons why cross-border deals continue to represent a sizable percentage of all M&A transactions.
Diversification
International sales also help businesses diversify their revenue streams. Depending on market conditions and economic trends, a company may be less vulnerable to downturns in a specific country or region.
Again, such considerations help drive demand, and the resulting benefits impact buyers and sellers alike.
Increased Revenue
Access to larger markets means the potential for increased sales and revenue. This is particularly true if a product or service meets the needs of consumers in different cultures and economic contexts.
The promise of increased revenue is a particularly strong attraction for anyone who wants to sell their business. Like the buyers and sellers involved, employees and other stakeholders—especially those who remain with the new entity—will see the potential for higher revenues as a favorable indicator of their own benefits.
Economies of Scale
International expansion can lead to economies of scale that might not be possible through a domestic sale alone. An international playing field often offers economies in bulk purchasing, production optimization, and distribution improvements that ultimately contribute to cost savings.
Such economies of scale make a potential M&A transaction more attractive to all parties involved.
Innovation and Learning
Cross-border ownership exposes a company and its workers to diverse work norms, cultural nuances, and business practices. This can stimulate innovation and help a company stay adaptable and responsive to changing market demands.
Access to Talent and Resources
An international sale can also provide access to a broader talent pool, specialized skills, and resources that may not be readily available domestically.
More talent and greater resources significantly enhance a company’s capabilities and competitiveness, and international mergers are one of the fastest ways to expand a firm’s resources strategically.
Risk Mitigation
Relying solely on one market can expose a company to risks associated with economic downturns, regulatory changes, political instability, or any number of other scenarios that negatively impact the business.
Diversifying internationally can not only mitigate these risks, it can also improve the perceived desirability of the seller’s company if the acquisition offers the potential to lower the company’s domestic risk factors.
Brand Recognition
Expanding globally enhances a company’s brand recognition and reputation, and a cross-border sale lays a firm foundation for making it happen in a shorter time frame.
In fact, whether it’s the seller or the buying company that enjoys the stronger brand image prior to joining forces, both entities can benefit from the synergies an international presence can bring to a brand.
Strategic Alliances and Partnerships
International expansion also offers opportunities to form strategic alliances and partnerships with foreign businesses. Cross-border collaborations can lead to shared resources, knowledge transfer, and mutually beneficial relationships—no matter where the buyer and seller were originally based.
Competitive Advantage
Ultimately, the combined benefits of a successful cross-border M&A transaction gives the newly merged company a competitive advantage over competitors who just operate domestically.
It not only allows the newly combined company to enter new markets before its competitors do so, it also provides the business with a wealth of resources that were either unavailable or unfeasible before the merger.
It’s important to note, however, that international acquisitions also come with challenges such as cultural differences, regulatory complexities, and logistical issues.
A careful assessment of these factors and a well thought-out growth strategy are crucial for successful business operations. And that’s where M&A advisory networks like Globalscope can really add value.
A World of Opportunities
With offices in 46 countries, Globalscope gives sellers access to an extensive and diverse pool of international buyers. Such expansive reach not only broadens the market for sellers, but also increases their visibility on an international scale.
A global footprint isn’t just a statistic. It’s a strategic asset for sellers seeking to get as much as they can from their transaction. For example, imagine a Life Sciences company contemplating a strategic sale.
Globalscope has a Life Sciences group that offers specialized knowledge in this specific sector. The combination of sector expertise and global capabilities ensures sellers are working with a team tailored to meet their individual needs.
Not only does this approach eliminate much of the learning curve, but working with an industry specialist can also help the seller raise valuations.
In fact, I believe sector-specific knowledge is increasingly mandatory for all middle-market transactions, not just cross-border deals. Globalscope offers extensive experience and global expertise in multiple sectors beyond Life Sciences including:
- Consumer
- Business & Financial Services
- Industrials
- Energy Transition
- Technology, Media & Telecom (TMT).
Specialty expertise also makes Globalscope more than a transactional partner in each sector. Deep category knowledge helps an advisor play a strategic role from the very beginning as well as throughout the M&A process. Areas in which one advisor may lack hands-on experience and expertise are covered by working in tandem with a partner who does.
Collaboration is Key
Collaboration lies at the heart of Globalscope Partners, a network that includes 55 member firms and is supported by hundreds of investment banking professionals worldwide.
Scale alone sets Globalscope apart as a resource for cross-border M&A middle-market services. The real power of the network, however, is the commitment members have to working together to get the very most they can for our clients.
Whether navigating complex financial structures, assessing market risks, or crafting innovative deal structures, Globalscope’s network of investment bankers stands as a testament to its ability to deliver comprehensive and sophisticated solutions.
As sellers embark on the intricate journey of business transition, the backing of investment bankers within Globalscope’s network becomes a strategic advantage. It’s not merely about the quantity but the quality of expertise that this extensive network brings to the table.
Sellers can rest assured they are not just navigating the M&A landscape; they are navigating it with a team of professionals who bring a wealth of experience, a global perspective, and a commitment to excellence.
A Seamless Solution
For sellers embarking on the intricate journey of business transition, the decision to partner with M&A advisory firms within a global network holds the promise of being transformative.
A global advantage, in-depth market knowledge, tailored advisory services, streamlined processes, and the power of an international network collectively contribute to an unparalleled experience for the seller.
As businesses evaluate their options for M&A advisory services, the unique benefits of Globalscope make it an attractive choice no matter where you are in the world. That’s why I chose to become a member myself. My firm and the sellers we work with are seamlessly connected to a world of greater possibilities.
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Marcin Majewski is the Founder and Managing Partner of Aventis Advisors. Based in Warsaw, Poland, Aventis Advisors is an M&A advisory firm focusing on technology and growth companies. (marcin.majewski@aventis-advisors.com)
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