Success fee structures for mergers and acquisitions worldwide 2017-2019
This statistic illustrates the advisory fee structures for successful merger and acquisitions according to deal makers worldwide in 2017, 2018 and 2019. As can be seen most advisors on merger and acquisition (M&A) deals use either a scaled percentage structure or simple percentage structure.
For a scaled percentage structure the advisor sets a base-level success fee for the initial deal valuation. If the completed deal go over this initial valuation a scaled fee is added. For example if an initial valuation of a deal was set at 50 million dollars and earned a two percent fee, the next ten million may earn 3% and the next ten million may earn 3.5%. Using this structure arguably aligns the investment banker or advisors interests with the seller, rewarding both parties for a higher deal value.
For a scaled percentage structure the advisor sets a base-level success fee for the initial deal valuation. If the completed deal go over this initial valuation a scaled fee is added. For example if an initial valuation of a deal was set at 50 million dollars and earned a two percent fee, the next ten million may earn 3% and the next ten million may earn 3.5%. Using this structure arguably aligns the investment banker or advisors interests with the seller, rewarding both parties for a higher deal value.
