An M&A is an M&A, is there a difference in outcome if an average bank does it vs. an elite boutique?
Why do clients pay higher fees for better service, if the result of closing the transaction is the same? What does “better service” even mean?
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I think you’re like, using buzzy words that overcomplicates why M&A is more about selling an experience than a “product” per se.
1) Why would a balance sheet bank win a M&A deal just because they have a balance sheet? M&A is cookie cutter the same no matter where you go so why does this matter?
Imagine you are the way home. Your wife calls you and tells you to pick up the following things from the store before you get back. Some meat for dinner and hairspray because she ran out. Are you going to stop at Trader Joe’s for the meat and then drive 10 minutes to CVS for the hairspray or are you going to just stop at Walmart because you can get all that you need in one stop. Yeah sure, maybe each individual product is a little worse, but hey what you value is the convenience of getting everything in one place for a bit cheaper fee.
However, there will then be premium snobs like me who thinks getting food from Walmart is deplorable, and would happily spend a little bit more for quality meat at Trader Joe’s, even with the extra gas money premium on top.
Different people (companies) have different priorities and flavor of M&A they want to run. They may prefer banks that have everything in one place and others want to maintain a variety of relationships across M&A & capital providers directly.
2) What does better service even mean? I mean there’s no one irrefutable definition of “great M&A service” because each process is infinitely customizable. Some companies want the bank with the best relationships with the type of acquirer they want (I.e. want to sell to a strategic company vs. a PE fund). Some people want the bank who can move the fastest process (regardless of who buys it). Some want the bank who get them the best price / consideration terms - great M&A providers usually excel in one particular flavor of M&A.
You may not be mature enough in your career to fully understand my metaphors above, but my honest advice is to just think simply about what a bank sells, who their customers are etc. to better understand why some dynamics are the way they are. If you understand why some would go to a Chanel vs. an Old Navy store - you should understand what could potentially differentiate M&A between different segments of the market.
Banks have a network, the knowledge to underwrite these deals and a strong brand. Then, there are the staff. Highly educated, experienced, polished - true leaders in their field. Relationships matter in this world and you don't send a bunch of semi-skilled people from an unranked school to this deal. Your staff are a big part of your brand. Anyone who ever worked on a deal team knows that stuff will go wrong. A capable team will fix these issues and make sure the client only hears about it when the problems are already solved.
Most traditional industry players simply trust them more than some random M&A consultancy. They need this deal to work out, their future might depend on it.
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