Selling a company without an intermediary: advantages and risks

In recent years, we have noticed an increase in the number of business owners who contact potential buyers directly — including Blue Mountain — without the intermediation of an M&A advisor, investment bank, or consultant. Some do this by conviction; others through ignorance of the alternatives; and not a few because of a reasonable distrust of intermediaries following negative experiences of their own or others.

The case for going direct

There are legitimate reasons why some business owners choose to sell without an intermediary:

Cost savings. M&A advisory fees typically range from 3-5% of the transaction value, plus a retainer. For a 20-million-euro transaction, this represents 600,000 to 1,000,000 euros. For some business owners, this cost seems disproportionate.

Confidentiality. Engaging an intermediary inevitably means sharing sensitive information with additional people. Some business owners prefer to limit the circle of knowledge, particularly in sectors where the announcement of a sale could affect customer or supplier relationships.

Speed. Removing an intermediary from the process can, in theory, reduce delays and simplify communication between buyer and seller.

Existing relationship with the buyer. If the business owner already knows the buyer — perhaps through a sector relationship, a mutual contact, or prior conversations — the intermediary’s role as matchmaker is unnecessary.

The risks of going direct

Lack of competitive tension. The single greatest value an intermediary creates is competitive tension — the presence of multiple interested buyers competing for the same asset. Without competitive tension, the buyer has no incentive to offer their best price. In our experience, the price difference between a competitive process and a bilateral negotiation is typically 15-25%.

Information asymmetry. In a direct negotiation, the buyer typically has more experience with M&A transactions than the seller. This asymmetry advantages the buyer in every aspect of the negotiation — from valuation methodology to deal structure to warranty provisions.

Emotional involvement. Selling a company is deeply personal. Having a professional intermediary manage the negotiations creates a buffer between the business owner’s emotions and the transaction dynamics. Without this buffer, negotiations are more likely to become adversarial or to stall over personal grievances.

Process management. A well-run sale process involves dozens of moving parts: buyer identification and approach, information management, NDA administration, indicative offer comparison, LOI negotiation, due diligence coordination, SPA drafting, and closing mechanics. An intermediary manages all of these. Without one, the burden falls on the business owner — who is simultaneously trying to run the company.

Valuation knowledge. Most business owners have no reliable framework for valuing their company. An intermediary provides market intelligence, comparable transaction data, and the experience to calibrate expectations realistically.

When going direct can work

Going direct is most likely to succeed when:

• The business owner has significant M&A experience (serial entrepreneur, corporate background)
• There is an obvious strategic buyer with whom a relationship already exists
• The transaction is straightforward (simple corporate structure, clean financials, no significant contingencies)
• The business owner engages a corporate lawyer and tax advisor to handle the legal and fiscal aspects

When it is risky

Going direct is risky when:

• The business owner has no M&A experience
• The company’s value is difficult to assess (complex structure, multiple divisions, intangible assets)
• The owner has unrealistic expectations about value
• There are multiple potential buyers who should compete for the asset
• The transaction involves significant complexity (cross-border elements, regulatory approvals, restructuring)

The buyer’s perspective

As a buyer, we treat direct sellers and intermediated sellers equally in terms of the seriousness and professionalism of our approach. But we also observe that direct sellers frequently make avoidable mistakes: they disclose too much information too early, they anchor on emotional valuations, they accept unfavourable LOI terms because they do not understand the implications, and they struggle to manage the due diligence process.

The irony is that the fee saved by dispensing with an intermediary is often more than offset by the value lost through a less competitive process and a less professionally managed negotiation.

Conclusion

Selling without an intermediary is a legitimate choice, and in specific circumstances it can work well. But for most business owners — particularly those selling for the first time — the cost of an intermediary is an investment that pays for itself through higher prices, better terms, and a more professionally managed process. The question is not whether you can sell without an intermediary, but whether doing so will cost you more than the fee you save.