Owners who have never worked with a merchant bank often ask a simple question: what actually happens? They understand the idea of advice, capital and hands-on work, but want to know how an engagement unfolds in practice, how long it takes and what is expected of them.
Every company is different, and the path depends on the owner's goals. But most engagements follow a recognisable sequence: prepare, position and approach, execute. This article describes each phase and what owners can expect.
Before the engagement: the first conversations
Everything starts with understanding. The first conversations focus on the owner and the company:
- What the owner wants: for themselves, their family, their team and the company
- How the business works, where it is strong and where it is vulnerable
- What options exist, including the option of doing nothing for now
These conversations are confidential and carry no obligation. The aim is to see whether there is a clear opportunity to add value, and whether the owner and the merchant bank would work well together.
Phase 1: Prepare
Preparation is where the foundation is built. It typically includes:
An honest assessment
A review of the company through the eyes of a buyer, investor or lender: financial quality, commercial strength, management depth, owner dependency, risks and opportunities.
A clear plan
A defined goal, whether exit, fundraise or a healthy cash-generating company, with the priorities needed to get there and a realistic timeline.
Hands-on work
Operating partnership on the areas that matter most. Depending on the company, this may involve:
- Building or strengthening the commercial engine
- Sales leadership, pricing and key account management
- Strengthening the management team and reducing owner dependency
- Reporting, KPIs and governance
- Processes and organisational structure
The length of this phase varies widely. Some companies are nearly ready; others benefit from a longer period of building.
Capital, where it fits
If the company needs capital during preparation, or if the owner seeks partial liquidity, the merchant bank may invest its own capital or arrange it from others.
Phase 2: Position and approach
When the company is ready, the focus shifts to how it will be presented and to whom:
- The equity story. A clear, evidence-based narrative of what the company is, why it wins and where it is going.
- Materials. Information memorandum, financial model, management presentation and data room.
- Counterparty mapping. Identifying buyers, investors or acquisition targets across Europe and North America that fit the owner's goals.
- Discreet approach. Initial contacts in a deliberate sequence, protecting confidentiality.
For acquisitions, this phase involves defining the thesis, mapping targets and approaching owners.
Phase 3: Execute
Execution brings the transaction to completion:
- Managing the process and timeline
- Coordinating meetings, questions and due diligence
- Evaluating offers on price, structure, conditions and fit
- Negotiating terms
- Working with legal, tax and financial advisers on documentation
- Supporting closing and communication
Throughout, the merchant bank aims to keep the owner focused on running the business, which is one of the best ways to protect value.
After the transaction
The relationship does not necessarily end at closing. Depending on the situation:
- If the merchant bank invested, it remains a shareholder and active partner
- After an acquisition, it may support integration
- After a partial sale, it may continue to work with the owner on the next phase
What is expected of the owner
- Openness. Sharing information honestly, including difficulties.
- Time. Particularly during preparation and key moments of execution.
- Willingness to change. Strengthening a company often means delegating and doing things differently.
- Clarity about goals. And readiness to revisit them as circumstances evolve.
Common questions from owners
How long does it take? It depends on the starting point and the goal. Preparation can be short or extended; execution of a transaction typically takes several months.
Do I have to commit to a transaction? No. Some engagements focus on building a strong, cash-generating company with no transaction planned.
Will my team know? Only those who need to, at the time they need to.
What makes an engagement go well
Engagements tend to go best when there is a clear, shared goal from the start and regular, honest review of progress against it. A short monthly session between owner and merchant bank, separate from board meetings, keeps priorities aligned and allows course corrections. Owners who involve their senior team early, explaining the purpose of the work without necessarily revealing transaction plans, also find that changes are adopted faster and with less resistance.
How LXN works with owners
Our process follows exactly this path: Prepare, Position and Approach, Execute. We combine transaction advice, our own capital and hands-on operating work, adapting the emphasis to each owner's goals and each company's starting point.
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