When Tabula Rasa HealthCare hired Goldman Sachs to advise on their $570 million sale to Nautic Partners, they paid $16 million in advisory fees - or 2.81%. But another company selling for $600 million around the same time paid 1.11%. That $10 million difference raises an obvious question: what determines M&A advisory fees?
Most published benchmarks offer vague ranges like "1-2% for your deal size" that hide massive variation. Even within narrowly defined size brackets, fees can vary by 50-100 basis points depending on deal characteristics, advisor selection, or process type.
This analysis provides specific data on how key factors impact M&A advisory fees, drawing from over 2,500 disclosed fees extracted from SEC merger proxies filed between 2015-2025. We quantify the impact of advisor tier (27-54 basis point spread), process type (37 basis point difference), related party dynamics (11 basis point discount), and multiple advisors (25 basis point premium)—showing how these factors interact to create the fee variation that simple averages obscure. Understanding where YOUR transaction falls within these ranges requires analyzing truly comparable deals across multiple dimensions. This is what FeeLegic enables.
Deal size establishes the baseline. Fees decline as transaction size increases due to economies of scale—the work to sell a $100M company isn't 10x less than selling a $1B company.
But these medians hide enormous variation. Understanding what drives this variation is critical for accurate benchmarking.
After deal size, advisor selection is one of the largest fee determinants. In the $500M-$1.5B range, the choice between an industry-specialist like Allen & Co or Raine and a middle-market advisor like Stifel can create a 54 basis point difference—$5.4M on a $1B transaction.
Data specific to $500M-$1.5B transactions
The 54 basis point spread between industry-specialists like Qatalyst and middle-market advisors like Raymond James reflects several factors. Industry-specialists bring deep sector expertise and targeted buyer relationships—they know exactly which 30 technology buyers or 20 media investors will pay premium multiples for specific asset types. Top independent advisory firms like Centerview and Evercore also command premiums through extensive relationships, senior banker involvement, and fairness opinion credibility.
The premium also reflects market positioning power. Boards often demand specialized or name-brand advisors for significant transactions, creating pricing leverage for certain advisors. The actual incremental work may not justify the full premium—but boards also pay for defensibility along with execution.
Industry-specialist and top-tier premiums make sense when you need buyer outreach across specialized networks, when sector-specific expertise materially impacts buyer targeting and valuation positioning, when advisor credibility affects buyer confidence in competitive situations, or when board fiduciary duty concerns demand name-brand coverage.
Consider middle-market alternatives when you have pre-identified buyers, when strong existing advisory relationships provide negotiation leverage, when deal complexity is modest and generalist capabilities suffice, or when the incremental sophistication genuinely adds limited value to your specific situation.
The critical question isn't whether a top independent advisory firm is "better" than middle market advisor in absolute terms—it's whether the specific value they add to your transaction justifies a multi-million dollar premium.
Competitive auctions command consistently higher fees than exclusive negotiations due to materially greater advisory workload and are often, but not always, used when certainty of a transaction may be lower.
In the $100M-$500M range, sole-advisor auction processes average 2.18% versus exclusive negotiations averaging 1.81%—a 37 basis point or 20% difference. This pattern holds across all deal sizes, though the absolute spread narrows in larger transactions where fees converge toward lower percentages regardless of process.
Trecora Resources' sale to Balmoral Funds demonstrates the auction premium. Guggenheim acted as Trecora's financial advisor and earned $6.5M—approximately 2.55% of Trecora's implied enterprise value.
Guggenheim conducted outreach to a broad group of potential acquirers, contacting 72 parties including 29 strategic buyers and 43 financial sponsors. Of these, 26 executed confidentiality agreements and received confidential information presentations. Despite this extensive outreach, the process resulted in just two IOIs, with Balmoral ultimately submitting a final, improved offer after extensive due diligence and negotiation.
The 2.55% fee sits 72 basis points above the $100M-$500M median of 1.83%, reflecting the substantial work managing a complex, multi-party process with uncertain outcome. Guggenheim contacted many potential bidders in their network, coordinated competing diligence tracks, and shepherded negotiations over several months—all characteristic of full-scope auction work.
Sharps Compliance's sale to Aurora Funds illustrates the exclusive negotiation baseline. Raymond James served as Sharps' financial advisor and received a fee of $3.1M or 1.89%—comprising $500K for a fairness opinion and an additional 1.50% of the transaction value at closing.
This transaction originated from a single, unsolicited offer made directly to the company's CEO from Aurora. The board engaged in targeted negotiations with this sole party to secure a final price before granting a brief period of exclusivity to complete diligence and finalize the definitive agreement.
Raymond James' role focused on valuation analysis, negotiating improved terms, securing board approval, and delivering a fairness opinion rather than buyer sourcing. The process ran just weeks from initial approach to signed agreement. Raymond James also had a pre-existing relationship with Sharps, having advised them in the past on their buy-side acquisition strategy.
The 66 basis point difference between Trecora (2.55%) and Sharps (1.89%) reflects genuine work differences and higher deal uncertainty:
The premium also reflects risk. Broad auctions with uncertain outcomes command higher fees to compensate for deal failure risk. As the Trecora example shows, contacting 72 parties doesn't guarantee a multitude of serious bids—advisors price for the effort and risk, not just successful outcomes.
Many deals fall between pure auction and pure exclusive negotiation. A process that contacts 15 parties but generates only one serious bid occupies ambiguous territory. Highly sought-after assets can command lower fees even in auction processes—when deal closure probability is high, advisors may accept lower percentage fees for certain payment. These nuances make transaction-level analysis critical.
When a party with a significant existing business relationship participates as the buyer, fees typically run 10-15 basis points below comparable processes.
In the $500M-$1.5B range, related party transactions average 1.45% versus 1.55% for non-related party deals—an 11 basis point or 7% discount. This translates to approximately $1.1M on a $1B transaction.
Restaurant Brands International's acquisition of Carrols Restaurant Group illustrates the related party discount. Jefferies, Carrols' financial advisor, earned a $12.3M fee equivalent to approximately 1.23% of enterprise value.
The transaction had clear related party characteristics. Restaurant Brands International, through its affiliates, is the franchisor for the Burger King brand, and Carrols is RBI's largest franchisee in the United States. Furthermore, RBI held a significant voting interest through preferred stock and had the right to appoint directors to the Carrols board.
At 1.23%, the fee sits 27 basis points below the $500M-$1.5B median of 1.50%—substantially below what a comparable unaffiliated transaction would command. The discount reflects reduced buyer-sourcing scope since the likely acquirer was already identified through the existing franchisor-franchisee and shareholder relationship as well as reduced deal risk.
Related party dynamics reduce fees through several mechanisms:
The discount is partially offset by enhanced fairness requirements:
The net effect is typically a 10-15 bps discount versus unaffiliated competitive auctions—less than the discount for pure single-bidder exclusive negotiations without related-party complications. The Carrols transaction's 27 bps discount below median likely reflects the combination of related party dynamics AND a more limited process scope beyond just the relationship factor.
Multi-advisor sell-side deals command total fees that are approximately 20% higher than single-advisor deals across deal sizes, though multiple advisors are more common in larger transactions.
In the $1.5B-$5B range, sole-advisor sell-sides average 1.16% while multi-advisor sell-sides average 1.41%—a 25 basis point or 22% difference. This translates to approximately $8M in additional fees on a $3B transaction.
The premium reflects several factors. Multiple advisors signal board desire for redundancy and specialized expertise—often combining a bulge bracket's broad relationships with an independent advisory firm's sector focus or fairness opinion credibility. The structure creates implicit competition between advisors, with each firm incentivized to demonstrate value through extensive work product.
Coordinating multiple advisory teams also adds genuine process complexity. Two firms mean coordinated materials production, consensus recommendations, duplicative meetings, and managing potential disagreements on strategy or valuation. Both advisors can justify this coordination cost as fee-worthy effort.
The decision to engage multiple advisors often reflects deal complexity, board composition requiring separate representation for different constituencies, or risk management. The 25 bps premium—$8M on a $3B deal—is meaningful but often justified by boards seeking maximum optionality and advisor coverage.
Fee splits between advisors vary greatly in multi-advisor situations. Many arrangements involve equal splits, while others use 60/40 or significantly different allocations. This can also be impacted by clients' desire to include banks on a transaction as a 'tip' for other work completed—maintaining banking relationships or rewarding past service. This 'tip' often provides the advisor with league table credit and another tombstone for their marketing materials but a less substantial fee amount, while the lead advisor captures the majority of economics.
For mid-market deals under $1B, multiple advisors are less common unless special circumstances exist (conflicted board members, competing shareholder groups, exceptionally complex regulatory situations). The incremental value and fee burden becomes harder to justify at smaller absolute dollar amounts.
Beyond the four primary drivers analyzed above, numerous additional factors create fee variation in specific situations. Sector matters—healthcare and technology transactions typically command premiums, largely reflecting higher typical complexity and specialized advisor requirements rather than sector alone. Cross-border transactions add basis points when they involve meaningful regulatory hurdles, multi-jurisdiction approvals, or complex tax structuring. Pre-existing advisory relationships can impact fees when they provide genuine negotiation leverage, reduced ramp-up time, and deep knowledge of the company..
The reality is that every transaction has unique characteristics that influence fees. Distressed situations, hostile defense work, special committee engagements, earn-out structures, regulatory intensity, management rollover complexity, and dozens of other factors can materially impact advisory costs. The factors highlighted in this analysis—advisor tier, process type, related party dynamics, and multiple advisors—explain a portion of fee variation in our dataset, but they're not exhaustive. Accurate benchmarking for any specific transaction requires identifying comparables that match across multiple dimensions simultaneously, which is why access to detailed transaction-level data becomes critical.
.The Complexity of Accurate Benchmarking
These factors don't operate independently—they interact in ways that make simple averaging dangerous. Consider two $750M transactions:
Deal A: Technology company, competitive auction (40 parties contacted), industry-specialist advisor (Qatalyst), standard domestic structure, no existing relationship
Deal B: Industrial company, exclusive negotiation, middle-market advisor (Stifel), pre-existing relationship
The expected fee in Deal A (2.30%) would be ~$9M higher than Deal B, reflecting fundamentally different deal characteristics—not fee negotiation skill or market timing. Benchmarking Deal A against the 1.50% median would suggest the fee is 80 bps too high. But compared to truly comparable transactions, 2.30% may be perfectly market.
This is why transaction-level data matters. Knowing that "the $500M-$1.5B median is 1.50%" provides a starting point. But without understanding how advisor tier, process type, sector, existing relationships, deal complexity, and other factors combine to produce that specific fee, the comparison is nearly meaningless.
Finding 10-15 comparable transactions. "Comparable" means matching on multiple dimensions:
Review merger proxies (DEFM14A, DEFM14C, 14D-9) for these transactions to understand fee drivers. Look for process descriptions that detail buyer outreach, timeline, relationship history, and special circumstances. Ten truly comparable deals are more valuable than 100 marginally relevant ones.
The challenge: finding truly comparable transactions requires access to detailed transaction data with searchable characteristics. This is where comprehensive databases that capture not just headline fees but deal characteristics become essential.
This analysis draws from over 2,500 transactions with disclosed M&A advisory fees extracted from SEC merger proxies (Schedule 14A), tender offer statements (Schedule 14D-9), and 8-K filings between 2015 and September 2025. We focus on sell-side transactions with U.S. advisors where fee disclosure was complete and unambiguous.
We exclude transactions with non-disclosed fees, bundled fee arrangements that combine multiple services without clear M&A fee separation, and opinion-only engagements without transaction success fees. Fee percentages reflect total advisory fees paid as a percentage of transaction enterprise value. For deals with multiple advisors, we aggregate total fees paid to all sell-side advisors.
We categorize advisors based on market positioning, typical deal profile, and sector specialization rather than firm size alone. We classify process types based on merger proxy descriptions of buyer outreach, competitive dynamics, and negotiation structure. We identify related party transactions through proxy disclosures of existing shareholder relationships, board representation, or material commercial relationships.
Getting fee benchmarking right matters because the dollar amounts are substantial. A 20 bps misjudgment on a $1B transaction is $2M. A 50 bps error is $5M. Boards owe fiduciary duties to negotiate reasonable fees—but "reasonable" requires understanding what comparable transactions actually paid.
The complexity is real. Is your $650M deal more comparable to $500M or $1B transactions? Does an existing lending relationship that provided one prior fairness opinion justify a 25 bps relationship discount? Is a process that contacted 15 parties but received only one serious bid an "auction" deserving premium fees?
These ambiguities are why simple fee calculators and generic benchmarks fail. They provide false precision without capturing the nuances that actually determine market rates.
Accurate benchmarking requires access to transaction-level data that captures deal characteristics—not just headline percentages. You need to see that Trecora paid Guggenheim 2.55% for a 72-party auction, that Sharps paid Raymond James 1.89% for an exclusive negotiation with existing relationship, and that Carrols paid Jefferies 1.23% in a related-party transaction. Then you can identify which pattern matches your situation.
The difference between paying 1.50% and 2.00% on a $750M deal is $3.75M. That's enough to justify serious benchmarking effort. It's also enough to justify using platforms to identify the right set of comparable transactions to support negotiations rather than relying on published ranges that hide critical variation, or worse, a comp set given to you by the same person you’re negotiating with.
FeeLegic maintains the industry's most comprehensive database of M&A advisory fees, with detailed transaction characteristics from 2,500+ disclosed deals. Our platform enables companies, private equity firms, and advisors to benchmark fees based on truly comparable transactions—not generic industry averages that hide 50-100 basis points of variation.
The analysis in this article represents a fraction of the insights available through FeeLegic. Our platform allows users to automatically identify the ideal set of comparable transactions based on dozens of variables. We capture not just headline fees, but payment structures, relationship history, process descriptions, and deal characteristics that actually drive fee variation.
When evaluating advisory proposals, you need to know whether the 2.35% proposal for your $100M technology exit is reasonable. FeeLegic gives you the context to evaluate whether 2.35% represents good value or underpricing that signals execution risk.
When negotiating fee structures, you need leverage that comes from knowing market rates for truly comparable deals. FeeLegic provides the specific transaction examples—with advisor names, process descriptions, and disclosed fees—that enable informed negotiation rather than accepting advisor-provided "market" ranges.
Whether you're creating fee runs for M&A fee proposals or evaluating engagement letters as a potential client, FeeLegic provides the transaction-level benchmarks you need to ensure you're paying the right fee for your specific situation. Learn more at feelogic.ai or contact us for a demo.
