What is M&A, actually? A plain-English guide for SA business owners

Say the words "mergers and acquisitions" to most South African business owners and you'll get one of two reactions: a glazed-over look, or a slightly defensive one. That's fair. The industry has done a great job of wrapping something fairly simple in a lot of unnecessary jargon.

So let's strip it back. Here's what M&A actually is, what happens in a sale, and what an advisor does — in plain English, for owner-run SA businesses.

First, the basics: what does "M&A" actually mean?

M&A stands for mergers and acquisitions. In practice, for a business your size, it almost always means one of these three things:

• Someone buys your business. You get paid, you hand over the keys (usually over a transition period), and you move on to whatever's next.
• Someone buys most of your business and you stay on for 2–5 years to help grow it, usually with an "earn-out" — extra money paid if the business hits agreed targets after the sale.
• You buy someone else's business to grow faster than you could organically.

Mergers — where two roughly equal businesses combine into one — are rare in the R5M–R250M range. Almost every deal in this space is an acquisition. So when we say "M&A", read it as "selling your business" 90% of the time.

M&A advisor vs business broker — what's the difference?

This one matters, because it changes the outcome by millions.

A business broker typically lists your business on a website, waits for enquiries, and passes them on. They work on volume — dozens of small businesses at once, mostly under R10m. The buyer pool is walk-in. Price is a function of who shows up.

An M&A advisor runs a targeted process. We build a shortlist of the specific strategic and financial buyers who would pay the most for your business, approach them confidentially, run them in parallel so they compete, and negotiate the deal from a position of leverage. We handle 4–8 sellers at a time, not 80.

The short version: brokers find you a buyer. Advisors find you the *right* buyer, and get them to pay more than they wanted to. On a R30m business, the difference between the two is usually R5m–R10m in the final price.

What actually happens in a sale — end to end

Most owners have never sold a business before, so the process feels opaque. Here's what really happens, in the order it happens.

### 1. Preparation (4–8 weeks)

Before any buyer sees your numbers, we prepare three things:

• Normalised financials. Your reported profit adjusted for owner's salary, personal expenses run through the business, one-off costs and non-recurring revenue. This is what buyers value against — not what's on your tax return.
• An Information Memorandum (IM). A 25–40 page confidential document explaining the business, the market, the numbers, the team, the growth story and why now is a great time to buy it. Written to make the business look like what it actually is at its best — not oversold, but properly framed.
• A buyer list. 40–120 named potential buyers: strategic (competitors, adjacent players, foreign entrants) and financial (private equity, family offices, HNW investors). Not a database dump — a hand-built shortlist.

Skip this stage and you'll go to market half-dressed. Most of the price uplift a good advisor delivers is earned here, before anyone sees anything.

### 2. Approach (2–4 weeks)

We approach the buyer list confidentially — usually via a one-page "teaser" that describes the business without naming it. Interested buyers sign an NDA, then get the full IM.

Confidentiality matters. Staff, customers and competitors should never find out you're selling until you're ready to tell them.

### 3. Indicative offers (4–6 weeks)

Interested buyers submit non-binding indicative offers — a price range, deal structure (cash vs earn-out vs shares), and any conditions. Typically 3–8 buyers make it this far.

This is where a competitive process pays off. When 5 buyers are looking at the same deal and know 4 others are too, prices go up. When 1 buyer is looking, prices go down.

### 4. Management meetings and shortlist (3–4 weeks)

The top 2–4 buyers meet the owner and management team, walk the site, and ask questions. We coach you through what to say and — more importantly — what not to say.

At the end of this we pick one buyer to go exclusive with. That decision isn't just about price. It's about certainty of close, cultural fit, what happens to the team, and whether the earn-out is achievable.

### 5. Due diligence and SPA (6–10 weeks)

The chosen buyer does deep due diligence — legal, financial, tax, commercial, sometimes technical. In parallel, lawyers negotiate the Sale and Purchase Agreement (SPA). This is where deals die if they weren't prepared properly. Surprises in due diligence lead to "price chips" — the buyer knocking money off because they found something.

Preparation matters more than negotiation here. If we surface the issues *before* the buyer finds them, we control the narrative. If they find them first, they own the negotiation.

### 6. Signing and closing

Signing is when both parties sign the SPA. Closing is when the money changes hands and shares transfer — usually days to weeks after signing, once conditions precedent (regulatory approvals, third-party consents) are met.

Then, usually, a transition period of 3–24 months while you hand over.

How long does the whole thing take?

For a well-prepared, well-run process on an R10m–R250m SA business:

• Best case: 6 months. Everything goes smoothly, buyer is decisive, DD throws up no surprises.
• Realistic average: 8–10 months.
• Worst case (still successful): 15–18 months. Usually because DD surfaces issues that need fixing, or the first buyer walks and we go back to the shortlist.

Deals that drag past 18 months usually die of exhaustion. Which is why a proper process is designed to keep momentum — buyers competing, deadlines set, no gaps for anyone to lose interest.

What does an M&A advisor actually do day-to-day?

Fair question. Here's what we're doing in a live deal, in rough order of time spent:

• Preparing the business. Normalising financials, writing the IM, building the model, gathering the data room.
• Buyer outreach and management. Approaching, qualifying, chasing, briefing, managing 30+ conversations at any given time.
• Negotiation. Playing buyers off each other, pushing for better price and terms, managing the tension without breaking anything.
• Deal structuring. Cash vs earn-out vs deferred, tax structure, working capital adjustment, warranties. Small structure changes can shift millions.
• Due diligence project management. Coordinating buyer requests, lawyers, accountants, tax advisors. Keeping the deal on the rails.
• Being the bad guy. So you don't have to. You need to keep a good relationship with the buyer post-close — you're often working for them for 2 years. Let us do the pushing.

What does it cost?

M&A advisors work on success fees — you pay us when the deal closes, as a percentage of the sale price. In SA, on deals in the R10m–R250m range, that's usually 3–7%, with a minimum fee that kicks in on smaller deals. There's sometimes a small upfront retainer that gets credited back at close.

If the deal doesn't close, most of the fee doesn't get paid. That means our incentives are aligned with yours — we only make real money if you do. And the more we push the price up, the more we both make.

Compared to the price uplift a proper process delivers versus a broker or a direct sale, the fee usually pays for itself several times over. But it's a fair question to ask any advisor: what's the fee, what's the minimum, and what happens if it doesn't close.

The uncomfortable truth about M&A

Most SA business owners will only ever sell one business in their lifetime. The buyer on the other side has done 10, 20, 100 deals. They know exactly which levers to pull. You don't.

That's the real reason to use an advisor. Not the process management, not the buyer list, not even the negotiation. It's that you're a first-time seller in a room full of professional buyers, and the asymmetry costs you a lot of money if it isn't corrected.

Where to start

If any of this is on your horizon — this year, next year, in five years — the two most useful free things to do are:

1. Get an indicative valuation. Know roughly what your business is worth today. We built [a free tool](/valuation) that gives you a range in 3 minutes.
2. Check your sellability. Score how attractive your business would look to a buyer across the 8 drivers they price against. [Free, 5 minutes](/sellability).

If it looks like a proper conversation would help, [book a 30-minute call](/contact). No slides, no fees, no signing anything. We'll tell you honestly whether now is the right time to sell, and if it isn't, what to do first.