How to Find the Best Investment Banks for Your Transaction

May 23, 2019

Buying or selling a business can be a daunting task, though more companies are predicted to consolidate this year. Fortunately, choosing an investment bank can help make the process easier for you.

Investment bankers act as a liaison and work on getting the best price and terms possible. Excellent investment banks will strive to take advantage of bidding tensions between potential buyers by hinting about the existence of other pending offers or publicizing an auction process. They’ll help determine whether the demands of the sale process are unreasonable. You should be able to count on your investment bank to have the tools and resources necessary to help you complete a transaction to your satisfaction.

How to Find the Best Investment Banks for You

When selecting an investment bank for a merger, acquisition or debt or equity financing, consider these key factors.

Reputation and Track Record

The reputation of an investment bank is critical. However, even more essential is the reputation of the professionals who will execute the transactions of the company. Take a look at the past deals that an investment bank has worked on and how many closed successfully.

Three areas to consider when assessing the experience of a deal maker: industry expertise, deal sizes and the role played in past transactions.

Selecting an investment bank that has experience working on deals of a similar size is essential because the deal’s size often implicates different demands and concerns. For example, a transaction amounting to $100 million will probably have more challenges and complexities than a deal amounting to $5 million. A major part of an investment banker’s value is familiarity and experience with the sale process that your company will go through.

Industry Experience

An investment banker with industry expertise relevant to your company is also critical. The knowledge of industry norms and standards, industry-specific valuation and business contacts are a major advantage for you in a sales or buying process. An investment bank with the right connections to buyers will help your company far more than an investment bank without these connections.

Learn the role that the investment bank played in previous deals. For example, was the investment banker leading the transaction or simply a part of the support team? An investment banker who led transactions likely has a better understanding of the sale process than an investment banker who tends to play a supporting role.

Also, conduct research on the investment bank’s commitment with other mandates. If the investment bank is currently in the process of working on five other deals that are much bigger than yours, it is unlikely that your deal will receive the attention deserved.

Accessibility and Location

The merger and acquisition process requires consistent communication between members of the deal team. Thanks to technology, dialogue and information sharing is easier than ever. However, face-to-face interaction will always be a necessity in the M&A process.

For sale processes involving companies that have an enterprise value below about $100 million, it’s necessary to have your advisor in proximity to improve the chances that the transaction succeeds. There are two reasons for this. The first is that the investment banking team can address issues that arise in person and attend meetings, as necessary. The second reason is that when an investment bank has a local presence, they will likely work harder to maintain the reputation in the local community. Accordingly, they’ll offer more attention to deals in their city or region.

While a local presence is a factor when choosing an investment bank, there are a few exceptions. If you expect that the business being sold or purchased will attract the attention of international buyers, the qualification of the investment banking firm may be more important than proximity. This is also true if the company happens to be in a particularly niche industry.

Chemistry and Trust

Personal chemistry is one of the most important things you should consider when hiring an investment bank to sell your company. The M&A process is time-consuming, and you can expect to spend dozens, or even hundreds of hours with your investment bankers as they prepare your business to be sold. You should be comfortable with reaching out to your investment bank for guidance and advice.

It’s essential that you fully trust the investment bank that you choose for the job since it will handle what will probably be your largest financial transaction. Therefore, you should select an investment banker who can get the job done properly. Choose one with excellent negotiating skills and the knowledge necessary to protect your interests above all during the sale process.

Sufficient Resources

Assess the resources that your investment bank allocated for your deal. An investment bank with a larger team may be better able to handle complex and large financial transactions at the same time. However, it is still essential that you make sure that your transaction is not just one among a pool of many being conducted by the investment bank.

At the end of the day, you want to choose an investment bank with the resources necessary to create a marketing program that is dynamic and maximizes your company’s value and delivers results that are world-class.

Strong Network of Contacts

Having a strong network of contacts is critical for the M&A process. Finding the right buyer or business to acquire is the goal, and the best investment banks have connections to help you achieve this. Choose an investment bank with a strong network of connections of buyers, sellers and capital source.

Fortunately, social networks have minimized the gap between boutique investment banks and large international investment banks in terms of connectivity. However, it’s still necessary to assess the ability of the investment bank to source potential buyers in the right regions or industries. If ideal prospective buyers are in a certain region, it may be best to consider a regional boutique investment bank that has an affiliation with international investment banks.


To choose the best investment banks for your transactions, it’s essential that you reflect on the objectives that you’re trying to achieve and the track record, reputation and connections of the individuals and investment bank you will work with. This will help you make a wise decision on the best investment banks to help you reach your goals.

For more information about our industry and M&A expertise and how we can assist in your next transaction, contact us.