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To help devise their M&A strategy, such technology businesses therefore require professional advice provided by independent consultants with an established record in the evaluation of technology executives, coupled with real business acumen. Advisors must have some key attributes:

1. Market knowledge
A high degree of intimacy with the market, both in terms of players as well as key decision makers, thus being able to quickly identify potential interlocutors that might be interested in a transaction and could be a good strategic fit for the kind of deal the client is envisioning.

2. Ability to assess People and Businesses
Financials are key in evaluating a business, but often the figures have to be interpreted far beyond their extrinsic value, and have to be put in perspective and benchmarked with indicators in similar companies. In addition - and often more important - it is necessary to assess the management, in particular the sales and delivery team, to predict the ability of the company to continue to perform or to explain why it has not performed in the past.

3. Direct Connections with Key Decision Makers
While the identification of the relevant target could be an exercise that could be done on paper, contacting potential interlocutors, especially in a very confidential way, has to be carefully handled. It is important that the Advisor not only knows how to approach these people, but possibly knows them already and has a private and direct access to them.

4. Attitude to mediation and formulation of a compelling proposition for both parties
A successful M&A transaction not only requires a win-win compelling proposition which addresses the key requirements of each party, but also mediation from the personal perspective of the respective interlocutors, in order to take into consideration soft factors which can often be critical.

5. Agility and responsiveness of an experienced and dedicated Senior Partner
In dealing with M&A transactions, speed and responsiveness is essential as well as agility and availability of an experienced Advisor used to dealing with critical missions in a very delicate context. While the study phase could be performed by a research team the approach and deal construction phase are better managed by a third party, perceived as senior, well respected and credible in providing relevant advice and who manages confidentially the most delicate phases, making himself available to assist without any sort of constraint.

6. High Confidentiality
On occasions this kind of process requires the highest discretion, even non-disclosure in the first instance of the real reason for the contact and certainly the name of the client, as often there is a requirement not to make public the decision to acquire or sell. To maintain strict confidentiality and avoid unnecessary leakages it is important to limit the number of targets, and consequently it is even more important to be able to make an intelligent selection beforehand.

7. Prior practical experience
Having the services of an Advisor who has hands-on experience of negotiating M&A agreements is clearly an advantage, and if such experience is within the technology sector and brings a genuine ability to correctly estimate the value of intellectual assets and likely recurring revenues, the impact may be critical. The cost of such advice presents other problems. Executives are concerned about appointing Advisors as they are afraid of committing to pay large retainers: they prefer to pay only on success. On the other hand, for a skilled Advisor, time is the only asset. To ensure the engagement of senior people on a professional basis a minimum retainer has to be committed.

The total fees for such advice follow certain norms. The range of fees is between 2-5% of the deal value, depending upon size, complexity and other issues, for example, constraints in considering components of the transaction such as payment in shares, refund of loans, etc.

It is customary to have a minimum success fee that is applicable in case for instance the price paid is negative, in other words if the seller has to pay a dowry to the buyer to take over the company.

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