Sale Mandate: Do You Need an M&A Adviser or Investment Bank, and at What Cost?

Quick answer. A sale mandate entrusts an intermediary — a sale adviser, an M&A boutique or an investment bank — with finding a buyer and running the negotiation. Their fee most often combines an engagement retainer and a success fee proportional to the price. Their involvement is mainly justified on significant or complex deals; for a small sale, the support of an accountant is often enough.

Selling a business is a profession in itself. A sale adviser specialises in it: they value the business, prepare the information pack, discreetly identify and approach potential buyers, organise the competition between them, then run the negotiation through to signing. On large deals, this role is held by an M&A boutique or an investment bank.

Legally, the owner gives the intermediary a mandate: a contract by which one person gives another the power to act on their behalf (Article 1984 of the Civil Code), the agent being required to account for their mission (Article 1993 of the Civil Code). The intermediary's main contribution is threefold: access to a network of buyers, the competition that supports the price, and the distance that preserves the relationship between seller and buyer. They do not, however, replace the upstream preparation of the sale, nor the rigour of the valuation.

An intermediary's fee generally combines two components, whose levels are negotiated and vary with the deal's size and complexity.

Success fees are often degressive: the percentage falls as the price rises, on a tiered scale. This structure rewards the adviser for completing the deal while preventing the cost from becoming disproportionate on large amounts. The engagement retainer, where it exists, is sometimes offset against the success fee on completion. The percentages cited in the market are only indicative: they are negotiated against the service provided and the expected difficulty of the deal.

The mandate may be exclusive — a single intermediary is in charge of the sale for a set period — or non-exclusive. Exclusivity commits the adviser more, as they invest time knowing they will be the sole contact; it is the norm on structured deals. In return, the owner must frame the duration, scope and exit conditions of the mandate, so as not to be tied to an inactive intermediary.

A few points deserve particular attention in the drafting:

1. The duration and the conditions for renewal or termination.
2. The scope of buyers reserved to the adviser and pre-existing contacts excluded.
3. The definition of "success" that triggers the fee (signing the deed, collecting the price).
4. The fate of the fee if the deal completes after the mandate ends with a buyer introduced during it.

The intermediary has a cost; their value is measured by what they earn you. Their involvement is generally worthwhile when the deal is large enough to absorb the fees, when the buyer market is wide and competitive, or when the deal is complex (several candidates, an international dimension, a sophisticated structure). The competition they organise can, on its own, more than offset their cost.

Conversely, for a small sale to an already identified buyer — an employee, a relative, a local competitor — the support of an accountant, paired with a lawyer, is often enough: valuation, letter of intent, tax structuring and securing the deed. The right reflex is to size the support to the stakes, not the other way around.

A well-run sale mobilises several complementary skills that should not be confused. The adviser or investment bank brings access to buyers, the competition between them and the commercial conduct of the deal. The accountant brings the valuation, the reliability of the accounts, the modelling of the move from value to price and the tax structuring. The lawyer brings legal security: protocol, representations and warranties, final deed.

On a small sale, these roles concentrate: the accountant and the lawyer are often enough, the owner handling the approach to an already identified buyer themselves. On a significant deal, each has their place, and coordination between them becomes a key success factor. The worst scenario is the one where no one steers the whole: the owner, already absorbed by their business, then suffers the complexity instead of mastering it.

A checklist before signing a mandate#

Before committing your signature, a few checks avoid disappointment:

1. Have your own valuation, to discuss price on solid grounds and not depend on the intermediary's figure alone.
2. Clarify the scope: which buyers are reserved to the adviser, which pre-existing contacts stay outside the mandate.
3. Define "success" precisely as the trigger for the fee, and the fate of the fee if the deal completes after the mandate ends.
4. Frame the duration and provide termination terms if the intermediary stays inactive.
5. Check confidentiality: an adviser approaches buyers on your behalf; discretion protects your business and your teams.

These precautions reflect not distrust but a healthy division of roles. A competent adviser understands and accepts them: transparency on the terms of the mission is the first sign of a balanced partnership.

Very small business. A structured adviser's fees are rarely suitable; a network specialised in small transfers or accountant support is more proportionate.

Sale to an already known buyer. The intermediary's role shrinks; it is then better to favour financial and legal advice to secure the price and the deed.

Auction process. When the aim is to drive prices up between several candidates, the intermediary comes into their own: it is precisely their core business.

• Frame the mandate: duration, scope, definition of success and fate of the fee after the mandate ends.
• Distinguish retainer and success fee and check any offset of one against the other.
• Do not delegate the valuation: the owner must have their own valuation to negotiate on equal terms.
• Match the support to the stakes: an adviser for a significant deal, an accountant and a lawyer for a small sale.

Recently, an owner hesitated to entrust the sale of their business to an investment bank, worried about the cost of the success fee. After analysis, the deal fully justified this support: the buyer market was wide, and the competition organised drove the price well above the initial spontaneous offer, more than covering the fees. Conversely, we advised a micro-business owner against engaging a costly intermediary for a sale to their sole employee: lighter support was far more suitable.

The question is not "adviser or not", but "what support for what stakes". Our role as chartered accountant is to inform this choice, provide an independent valuation and, where relevant, work alongside the adviser to secure the financial and tax side of the deal.

We see it on every deal: what makes a sale succeed is not this or that party taken alone, but the quality of their coordination around the owner. A brilliant adviser without a solid financial counterpart, or a perfect legal file but a poorly defended price, always leave value on the table. Our role is often that of the discreet conductor: providing the right figures, connecting the advisers and ensuring the owner keeps, to the very end, control of the decisions that commit their wealth.

Hayot Expertise advice. Before signing a mandate, have your own valuation prepared and clarify the real stakes of the deal. Frame the duration, scope and definition of success. We help you decide the right level of support and negotiate a balanced mandate.