Average Deal Fees/Costs?

July 16, 2024

by a searcher in Los Angeles, CA, USA

I've bought businesses before and I'm searching again. I have spent a wide range on vendors depending on the deal size and vendors used. What have others spent on average on legal, accounting, etc? Thanks for sharing!

2 Likes

28 Replies

305 Views

Replies

Reply by a searcher
in New York, NY, USA

Generally I approach it by expecting to pay $20-25k for a full QofE (and around half that for a QofE Lite), about 1% of transaction value in legal fees (diligence, docs, equity raise, tax advice), and then another 10-15k in ancillary fees. But these amounts are probably too high for a cookie-cutter deal and probably too low for one where there is a lot of hair. This is assuming a $4-8mm EV. More important than the amount, though, is the timing. Are you paying these fees upfront? At closing? If at closing, do you get any form of a break if the transaction falls apart prior to closing? For a self-funded searcher, those are far more important considerations, in my view.

Reply by a professional
from University of Michigan in Detroit, MI, USA

Hi ^redacted‌, we typically come in between 1%-2% of EV, depending on the circumstances (are investors involved, real estate, etc.). For really small deals (EV<$1MM), we'll normally work on an hourly basis and encourage our clients to do some of the easy lifting to keep costs down. For anything bigger than that, we work on either an hourly or a fixed fee basis, depending on what the client wants. Hope that helps. Feel free to DM me here or reach out directly at redacted if you have more questions.

+26 more replies.

Join the discussion