How much does it cost to hire an M&A advisor in Canada?
M&A advisors charge a success fee that falls as a percentage as deal size increases, and most also charge a work fee during the engagement. The most common success fees in the same survey were 4.8% on a $5 million deal, 3.4% on a $20 million deal and 2.0% on a $100 million deal, with North American fees somewhat higher than these global figures (Firmex, Global M&A Fee Guide 2024-25). In a 2024–25 survey of 456 middle-market advisors (about half in North America), the most common monthly work fee was $5,000 to $10,000, and the most common fixed engagement fee was also $5,000 to $10,000 (Firmex, Global M&A Fee Guide 2024-25).
Fee Structures for M&A Advisors in Canada
The most common fee structure is a success fee—a percentage of the final transaction value paid only when the deal closes. This aligns the advisor's incentive with yours: they get paid when you get paid.
Most advisors combine a success fee with a work fee, charged monthly, as a fixed amount at signing, at milestones or hourly. In the same survey, 30% of firms charged monthly fees, 28% fixed fees, 13% milestone fees and 9% hourly fees, and 19% of North American firms charged no work fee at all (Firmex, Global M&A Fee Guide 2024-25). An M&A advisor's work fee is not the same as the upfront fee some business brokers charge on smaller sales, which is applied against the closing commission.
Success Fee Percentages by Deal Size
Success fees decline as deal size increases. Success fees vary by deal size:
- Under $1 million: 10% to 12%
- $1 million to $5 million: 6% to 10%
- $5 million to $25 million: 4% to 8%
- Above $25 million: 2% to 5%
Two common pricing formulas structure these fees:
Lehman Formula: 5% of the first $1 million, 4% of the second million, and so on down to 1% (Firmex, Global M&A Fee Guide 2024-25).
Double Lehman Formula: starts at 10% and falls to 2% (Firmex, Global M&A Fee Guide 2024-25).
Retainer and Upfront Costs
Business brokers serving Main Street businesses usually charge a flat commission percentage with no monthly work fee. The International Business Brokers Association (IBBA), a US-based association, says business broker commissions on Main Street sales can range from 8% to 15% of the final sale price and may be subject to an agreed minimum (IBBA, Your Guide to the Business Brokerage Profession, 2021).
On very large deals, success-fee percentages are lower still: the most common rate in the survey was 2.0% on a $100 million deal (Firmex, Global M&A Fee Guide 2024-25).
About a quarter of the M&A firms surveyed (24%) write a minimum success fee into their agreements (Firmex, Global M&A Fee Guide 2024-25). Ask whether a minimum applies and how much it is, because on a smaller deal it can exceed the percentage calculation.
Additional Costs and Expenses
Out-of-pocket expenses such as legal fees, valuation reports, and marketing materials typically add 2% to 5% to total advisory costs. These are usually billed separately and may include:
- Legal document preparation
- Third-party valuations
- Marketing materials and confidential information memorandums
- Travel expenses for meetings with buyers
- Data room setup and management
How Fees Vary by Transaction Type and Complexity
Cross-border transactions and industry-specific deals often command higher fees because of the added complexity. Advisors handling deals involving regulatory approvals, intellectual property transfers, or multi-jurisdictional buyers bring specialized expertise that justifies higher compensation.
Deal complexity—not just size—drives cost. A $3 million manufacturing business with clean financials and a single buyer may cost less in advisory fees than a $2 million SaaS company with deferred revenue, multiple investor classes, and cross-border tax considerations.
This article is for informational purposes only and does not constitute financial, legal, or business advice. Every business sale is different. Before making decisions about valuation, pricing, or engaging an advisor, consult a qualified professional familiar with your specific situation.
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