The fees charged by M&A consultants have always been the main source of income for investment bankers, especially M&A intermediaries. They often sign the M&A Intermediary Financial Advisory Service Agreement with buyers or sellers or even both parties to lock in the service fees after the completion of future M&A transactions.

In fact, the information asymmetry and resource asymmetry in the financial market or the capital market are themselves a pricing basis, and it is normal to pay financial consultant fees. But I want to say a few words about the merger and acquisition of some unprofessional financial advisers in the circle. You said that it is reasonable to go to the seller's target company to do due diligence and sign an exclusive financial advisory agreement with the seller to get money, but what should we think of the "middleman" who sends messages and business cards in the WeChat group all day? Last year, the editor-in-chief of M&A Annual Report personally experienced a list, in which the people were responsible for the target enterprise to find the target that a listed company was interested in among multiple targets, and charged an intermediary service fee of 1.0% to get one or two million, which was fair. Listed companies issue shares to purchase assets, and cash is paid by M&A fund. However, this target information needs a "messenger" and 1.0% to reach listed companies and M&A funds. Hehe ... does that mean that we can squat in the WeChat group, wander around in various brokers, private placements and listed companies, and look for targets everywhere to make a living? Looking back, have you ever thought that there is still room for this kind of information asymmetry (non-resource asymmetry) in the future?

In fact, the financial adviser of the buyer wants the funds of listed companies or M&A funds. What you need to do is to find the target company that meets the requirements of the buyer, conduct full due diligence, send the due diligence report to the buyer, and be responsible for facilitating the negotiations and transactions between the buyer and the seller. The seller's financial adviser is asking the target company for money. What you need to do is to find a buyer's listed company or M&A fund with the right price, and finally withdraw the financial consulting fee according to the actual M&A transaction price received by the seller. But what needs to be reminded is not to be too unprofessional. It's just that a friend of a friend said he had a target in his hand (who knows if the information of a friend's friend is second-hand), and then he went up to ask the buyer for money. This shows that you are an outsider, and you have no idea whether you are a buyer's consultant or a seller's consultant. Of course, there are also two people eating, but they are generally professional M&A fund managers. They are not only the exclusive representatives of the buyer, but also the exclusive representatives of the seller after finding the target and negotiating. People can use this money safely! In addition, is this financial consulting fee free or is there any standardized pricing basis? In China, there are no rules, and it is often good for both sides to be happy. However, foreigners have been playing for so many years, and some rules are still worth learning in our domestic investment banking circle (such as the step-by-step charging model of "Lyman formula"), because I really can't stand the charges in some circles! ! !

Today's M&A Yearbook has compiled the M&A Business Charge Standard of Foreign Financial Institutions and the M&A Financial Consultant Agreement-Template for the business personnel in the investment banking circle.

"The investment banking circle is full of prodigies, and they are not stupid. What's more, this is not an era of calling by BP machine. Scalper tickets or services can be charged, but information is not charged, especially those who only forward a WeChat business card to introduce a friend. Money, haha, how poor are you? ! Poor ambition cannot be short! At least how much work each of us investment bankers can do, how much role we can play, and how much money we can collect. "

M&A record company

1. Financial consultant fee: Who will collect it? Take what? How to collect it?

(1) Who will collect: foreign-funded institutions, brokers, investment companies, trust companies and other intermediaries or individuals, mainly brokers.

(2) What to collect: employment deposit, initial fee, sales representative fee, consultant fee, transaction management fee, fair opinion fee, termination fee and success fee.

(3) How to collect: fixed fees and variable fees based on transaction prices.

(1) Who will collect: foreign-funded institutions, brokers, investment companies, trust companies and other intermediaries or individuals, mainly brokers.

In recent years, the M&A market in China is surging. In this fast-growing M&A market, a group of M&A financial consultants are active. They are deeply involved in M&A transactions and provide professional services such as overall planning, target search, due diligence, scheme design, negotiation counseling, material production and approval for customer mergers and acquisitions, asset restructuring and debt restructuring. These financial advisers include foreign-funded institutions, brokers, investment companies, trust companies and other intermediaries or individuals, among which brokers are the main service providers in this market. Brokers have been involved in M&A business for a long time. Since the mid-1990s, some brokers have started to set up M&A departments. Since 200 1, the channel system has restricted the underwriting business of brokers, and the attention to M&A business has been greatly improved. Although all securities companies have set up special M&A departments, most of them are still unclear about the profit model of M&A business, and only a few securities companies have established their own profit model and established their position in the market.

(2) What to collect: employment deposit, initial fee, sales representative fee, consultant fee, transaction management fee, fair opinion fee, termination fee and success fee.

At present, there is no uniform fee standard for financial consultants in M&A. The complexity of M&A operation, the size of M&A target, the length of operation cycle and the strength of negotiation between the two parties are different, but the overall scope basically falls between 6.5438+0.5 million and 5 million. There are a few M&A cases with large targets and complicated operations, and the amount of financial consultants is more than 6 million yuan. Generally speaking, the consulting fees of listed companies M&A are higher than those of non-listed companies, the consulting fees of listed companies M&A involving state-owned shares are higher than those of listed companies with legal person shares, and the consulting fees of tender offer acquisition M&A are higher than those of ordinary agreement acquisition.

Generally speaking, the fees charged by financial advisers are reached through consultation between financial advisers and customers. This is very different from the fees charged by western financial advisers for mergers and acquisitions. M&A consulting fees of western investment banks generally include fixed fees and variable fees based on transaction prices. Specific projects are further subdivided into employment security deposit, franchise fee, sales representative fee, consulting fee, transaction management fee, fair opinion fee, suspension fee, success fee, etc. General success commission accounts for about 30-60%.

(3) How to collect: fixed fees and variable fees based on transaction prices.

The charging mode of overseas investment banks reasonably decomposes the financial advisory services of mergers and acquisitions and pays the fees separately. On the one hand, the fixed fees of various projects ensure the interests of financial consultants, and reflect the recognition and affirmation of the service value of financial consultants. On the other hand, variable fees based on transaction prices have a good incentive effect on financial advisers. With the maturity of M&A market in China, financial consultancy fees will also develop to more detailed itemized pricing. At present, China's M&A financial consultant fees are basically collected by stages, and the most common is divided into four steps. First of all, the two sides signed a financial advisory agreement, and the brokerage company charged a down payment. The down payment ratio is generally around 10-20%, and the minimum is generally not less than 200,000. After signing the M&A agreement, the second installment payment will be charged, with a general proportion of 30-40%. After all M&A transactions are approved, the third phase will be collected, and the general proportion is about 30%-40%. Generally, up to now, about 90% of the financial consulting fee should have been collected, and the remaining 65,438+00% should be collected after the equity transfer. With the deepening of the complexity of M&A transactions, customers' dependence on financial consultants has gradually increased, and the initiative to pay has gradually increased, which is reflected in the fact that the proportion of financial consultants charged by brokers has moved forward.

Merger and acquisition of financial advisory business and traditional investment banking business have their own advantages. The single income of traditional investment banking projects is relatively high, generally more than 6.5438+million yuan, and the cost is absolutely guaranteed after the transaction is completed. The advantage of M&A's financial consulting business is that its operating cycle is much shorter than that of traditional investment banks, and the number of companies operating is not limited, which basically has no operational risks and does not occupy company resources. Moreover, with the expansion of the domestic M&A market and the improvement of the complexity of M&A business, the market's recognition of the value content of M&A financial advisory services has increased, and the profit prospect of M&A business is more optimistic. For brokers, the per capita profit advantage and growth potential of M&A business are more prominent when the average rate of return of the industry declines.

Second, the legendary Lyman financial advisory fee formula.

(1) According to the form of remuneration, it can be divided into three types.

(2) According to the charging method: Lyman formula.

(3) the cost of leveraged buyout

Fees charged by foreign financial institutions for M&A business. When foreign-funded financial institutions engage in M&A business, their fees vary due to different service contents, and there is generally no clear regulation. According to different classification methods, there are mainly the following charging methods:

(1) According to the form of remuneration, it can be divided into three types.

① Front-end handling fee. When a large investment bank accepts a contract from a client, it usually needs to pay a certain fee in advance. The front-end handling fee has two meanings. For investment banks, it can make up for the loss of other energy, and it is also a proof of customers' firm will for mergers and acquisitions. Therefore, investment banks can plan their work safely and carefully. Regardless of whether the merger is successful or not, customers have to pay the front-end handling fee of the investment bank.

2 success fee. After the merger is successful, the customer pays according to the transaction amount. This is the most common way to pay for investment banking services.

③ Contract execution cost.

(2) According to the charging method.

① Fixed proportion commission. No matter how big the M&A transaction volume is, investment banks charge commissions according to a certain proportion. The fixed proportion is generally determined by the investment bank and the customer through consultation. The greater the volume of M&A transactions, the lower the proportion.

② Decreasing proportional commission. In other words, the commission of investment banks decreases proportionally with the increase of transaction volume. The regressive proportional commission can be calculated by Lyman formula. Lyman formula: amount, quantity and commission ratio (%) No.65438 +0 $ 1 ten thousand; The fifth place is $65,438+00,000; No.3 $1; No.4 $1; For example, the transaction amount of an M&A project is 5 million. Then the commission calculated by Lyman formula is100x5%+100x4%+100x3%+100x2%+100x1%=

③ Progressive proportional commission. Investment banks and customers estimate and forecast the amount required for M&A transactions in advance. In addition to charging a fixed percentage commission according to the estimated transaction amount, if the actual amount is lower than the estimated amount, they will also give a progressive percentage commission as a reward. If the actual amount is higher than the estimated amount, the commission will be deducted in a progressive way as a punishment for the investment bank. This can stimulate the innovation ability of investment banks.

(3) the cost of leveraged buyout

Investment banks have to charge some extra fees for participating in leveraged buyouts. Because in leveraged buyout, the funds for acquiring the target company are mainly obtained through bank lending or issuing junk bonds (junk bonds), investment banks can charge fees from four aspects according to the characteristics that the acquirer mainly uses debt funds and requires confidentiality:

(a) put forward opinions and plans for the acquisition;

② Arrange fund raising;

③ Arrange transitional financing (also called bridge loan, that is, temporary capital borrowing before the completion of long-term debt financing);

④ Other consulting fees. At the same time, investment banks can also provide bridge loan with their own capital.

In addition, among the "other consulting fees", some fees are collected by investment banks to evaluate the target company of acquisition or merger and provide fair opinions, and the level of fees is determined by both the investment bank and the target company of merger and acquisition.