If you're aiming to sell your call center, be forewarned: An investment bank that matches buyers and sellers - be it a large brand name house or lesser known boutique shop - may not be the right partner for you.

Many investment banks, despite statements to the contrary, lack adequate knowledge about prospective buyers and sellers (mostly outsourcers) in the market. Also, most banks lock call centers into fee-laden contracts that put the institution's financial interests before the client's. The results, too often, are prolonged and expensive searches for a buyer.

Industry in Flux

There are, to be sure, plenty of prospective buyers. The merger and acquisition business is alive and well, thanks in part to the influx of offshore companies seeking to snare a share of the multibillion dollar call center industry.

Foreign outsourcers, predominantly from the Asia-Pacific region, are acquiring or partnering with US call centers. American service bureaus, too, are consolidating to become more competitive. Combine these developments with pending Do-Not-Call (DNC) legislation in Washington, and you have enough turmoil to give even the most psychologically adjusted call center owner more than a few sleepless nights.

If you're among them, and have decided to cash out, you'll likely turn to a Wall Street investment banking firm that specializes in mergers and acquisitions (M&A). These outfits offer highly educated, motivated and analytical investment bankers. They do lots of research. And they're well connected.

But investment bankers are mostly generalists who do not focus on any one industry. Also, most won't touch a business unless the seller has at least $25 million in annualized revenue. If they decide to take you as a client, you'll have to pay a retainer fee, which start at $50,000. There are fees, too, for research activities: appraising; publishing a "book"; profiling and positioning your business; plus a "success fee" for selling your business.

Assuming you've decided on a friendly local investment banker to do business with, you'll be locked in for the duration of the sales process. Until the banker locates a suitable buyer who can conclude the transaction, the banker controls your destiny.

Before you sign on the dotted line with your new best friend, ask yourself, "Is it in my best interest to relinquish control?" If, as seems likely, you experience a scenario that I had three times in recent months, I think not.

The latest incident occurred in December when I, a call center broker, received a call from the president of an outsourcer. He read one of my ads and inquired if I had a buyer for his business. He didn't tell me he had already signed up with a nationally recognized investment banking firm. Following a long chat about his business, I indicated I had a qualified buyer.

After hanging up, the owner asked his investment bank to contact me, which it did. The bank's account rep courteously informed me that his firm was handling all aspects of the sale. I then mentioned that I might have a qualified buyer for the client. And I said that, as a broker, I require an agreement detailing a share of the transaction before divulging the prospective buyer.

What happened was startling. The tone of the conversation changed. The rep said his company forbade the sharing of fees with third parties. The opportunity for his client was terminated on the spot. I never heard from the banker or seller again. The call center owner was left out in the cold.

An Easier Way

If you want to avoid this scenario, do your homework. Determine your company's worth and learn about the parties - investment bankers, brokers, and other M&A specialists - who can help find a buyer. Then select professionals who will help you day in and day out; know the call center business; and will put your interests first. The last means, among other things, negotiating a flexible contract that allows for third-party intermediaries who can speed the sale - and save you untold hassles and costs.

- John Weikert is president of Weikert & Company LLC, a Bridgeport, Connecticut-based broker for the call center and telemessaging service industries. He can reached at jweikert@optonline.net or 203-371-6423.

If you're aiming to sell your call center, be forewarned: An investment bank that matches buyers and sellers - be it a large brand name house or lesser known boutique shop - may not be the right partner for you.

Many investment banks, despite statements to the contrary, lack adequate knowledge about prospective buyers and sellers (mostly outsourcers) in the market. Also, most banks lock call centers into fee-laden contracts that put the institution's financial interests before the client's. The results, too often, are prolonged and expensive searches for a buyer.

Industry in Flux

There are, to be sure, plenty of prospective buyers. The merger and acquisition business is alive and well, thanks in part to the influx of offshore companies seeking to snare a share of the multibillion dollar call center industry.

Foreign outsourcers, predominantly from the Asia-Pacific region, are acquiring or partnering with US call centers. American service bureaus, too, are consolidating to become more competitive. Combine these developments with pending Do-Not-Call (DNC) legislation in Washington, and you have enough turmoil to give even the most psychologically adjusted call center owner more than a few sleepless nights.

If you're among them, and have decided to cash out, you'll likely turn to a Wall Street investment banking firm that specializes in mergers and acquisitions (M&A). These outfits offer highly educated, motivated and analytical investment bankers. They do lots of research. And they're well connected.

But investment bankers are mostly generalists who do not focus on any one industry. Also, most won't touch a business unless the seller has at least $25 million in annualized revenue. If they decide to take you as a client, you'll have to pay a retainer fee, which start at $50,000. There are fees, too, for research activities: appraising; publishing a "book"; profiling and positioning your business; plus a "success fee" for selling your business.

Assuming you've decided on a friendly local investment banker to do business with, you'll be locked in for the duration of the sales process. Until the banker locates a suitable buyer who can conclude the transaction, the banker controls your destiny.

Before you sign on the dotted line with your new best friend, ask yourself, "Is it in my best interest to relinquish control?" If, as seems likely, you experience a scenario that I had three times in recent months, I think not.

The latest incident occurred in December when I, a call center broker, received a call from the president of an outsourcer. He read one of my ads and inquired if I had a buyer for his business. He didn't tell me he had already signed up with a nationally recognized investment banking firm. Following a long chat about his business, I indicated I had a qualified buyer.

After hanging up, the owner asked his investment bank to contact me, which it did. The bank's account rep courteously informed me that his firm was handling all aspects of the sale. I then mentioned that I might have a qualified buyer for the client. And I said that, as a broker, I require an agreement detailing a share of the transaction before divulging the prospective buyer.

What happened was startling. The tone of the conversation changed. The rep said his company forbade the sharing of fees with third parties. The opportunity for his client was terminated on the spot. I never heard from the banker or seller again. The call center owner was left out in the cold.

An Easier Way

If you want to avoid this scenario, do your homework. Determine your company's worth and learn about the parties - investment bankers, brokers, and other M&A specialists - who can help find a buyer. Then select professionals who will help you day in and day out; know the call center business; and will put your interests first. The last means, among other things, negotiating a flexible contract that allows for third-party intermediaries who can speed the sale - and save you untold hassles and costs.

- John Weikert is president of Weikert & Company LLC, a Bridgeport, Connecticut-based broker for the call center and telemessaging service industries. He can reached at jweikert@optonline.net or 203-371-6423.