I am reviewing a model now that breaks down transaction fees into:
- Seller Legal
- Buyer Legal
- Lender Legal
- Buyer Consultants
- Payroll Tax
- Seller M&A fee
- Transaction fee
What are these final two line items? Who receives these fees? Are these success fees for the investment bankers? (For context, the final two line items account for 80% of the total transaction fees).
Appreciate any help
Banks usually will have a fee attached with advising the client on a transaction irrespective of if it goes through or not, and another for a successful completion of the transaction.
For example, Twitter is paying GS 80mil for advising them on the Elon musks takeover bid. 15 mil has already been paid and 65mil will be paid on the successful completion of the transaction.
Is it usual for bank fees to be so much higher than lawyer fees? Are they really adding that much extra value?
yeah I mean in an M&A transaction the bankers are the ones doing all the heavy lifting (the analysis, the marketing, running the due diligence) so almost certain that they are the ones with the highest amount of attributable fees.
I think M&A fees > lawyer fees but I assure you the only real value add in any of this are the lawyers
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