Why Hiring International M&A Advisors Kills South African Exits

What if I told you that hiring a US advisor to sell your software business to American buyers could jeopardise your deal before it even begins?

Most South African business owners make the same logical-sounding mistake: "If I want international buyers, I need an international advisor." They assume global firms have better networks, understand international buyers better, and can command higher valuations than local advisors.

Here's what I've learned after watching this play out dozens of times: international advisors are terrible at selling South African businesses. And weirdly, the bigger their global brand, the worse they get at it.

Let me explain why the "obvious" choice of international representation consistently destroys South African exit values—and how the right local expertise actually delivers the international outcomes you're after.

Reason #1: They don't get South African business realities

Global firms work from textbook models that completely miss what makes South African businesses valuable.

When international advisors look at your business, they apply first-world assumptions that just don't work here. They see BEE requirements as red tape rather than competitive advantages. They view load-shedding as a deal-killer instead of a resilience story. They interpret Rand volatility as pure risk rather than an opportunity for currency arbitrage.

I watched a London-based advisor completely torpedo a mining services deal by positioning the company's South African operations as problems to solve rather than strategic advantages to leverage. The same business sold six months later through our process at a 40% premium because we positioned their local expertise as exactly what international buyers needed for African market entry.

Your South African context isn't a bug, it's a feature. But only advisors who really understand this market can sell it that way.

The 80% rejection rate reality

Here's what happens when international advisors cold-call US buyers about South African software businesses: 80% immediately say "Not interested in SA investments." End of conversation.

But the deals that do work? They almost always involve buyers with some South African connection—someone who worked in Cape Town, a CEO who's been to a braai, some personal link that creates confidence.

Local advisors know to look for these connections before picking up the phone. We research decision-makers' backgrounds, hunt for South African employees in target companies, and identify cultural bridges that international advisors would never think to explore.

International advisors are flying blind, making cold approaches that trigger immediate geographic rejection.

Reason #2: They can't position your business as a strategic opportunity

International advisors can only present "here's a software business and why it's good." They don't know how to position your South African operation as a low-cost, high-quality producer rather than just another competing software business. This positioning difference is worth millions in valuation.

This is especially true if the foreign acquirer has a gap in its global operations map that the South African business can fill. Companies with clear geographic gaps often become highly motivated buyers willing to pay premiums for immediate market access rather than building operations from scratch.

Reason #3: They can't handle the "SA scepticism"

The biggest hurdle in international software deals isn't technical due diligence—it's getting past the initial "we don't invest in South Africa" response. This requires understanding both the local context and international buyer psychology.

Most international buyers have never been to South Africa and base their opinions on outdated media stories. When a US buyer raises concerns about load-shedding, an American advisor sees it as game over. A local advisor explains how South African businesses have built resilience that creates competitive advantages in unstable environments worldwide.

International advisors can't credibly overcome this scepticism because they don't deeply understand the realities themselves.

Reason #4: International buyers don't trust international advisors selling South African assets

This might surprise you, but international buyers are sceptical when global advisory firms try to sell them South African businesses.

Savvy acquirers know that international advisors often lack a deep understanding of local markets, regulations, and operational realities. They assume the advisor is either desperate for deals or doesn't really understand what they're selling.

When we approach international buyers on behalf of South African clients, our local expertise increases credibility. Buyers think: "If the top local advisor is representing this business, it must be genuinely valuable."

Reason #5: You're at the bottom of their priority pile

Picture this: A Florida-based advisor has 20 active deals. Nineteen are US companies selling to US buyers—easy, familiar territory. One is a South African software company that needs to be sold internationally.

Guess which deal gets attention first? It’s not yours!

When you're deal number 20 on someone's list, and you're the "difficult" international one, you're not getting their A-team effort. You're getting whatever time is left over after they've worked on their easier, more profitable local deals.

But for us? That South African software company with international potential, that's our most valuable deal. That's the one at the top of our priority list, getting our best resources and attention.

Reason #6: They can't afford to do proper research

This might surprise you, but international advisors have a resource problem. I was talking to a Canadian advisor yesterday who admitted they can't afford to do the level of research we do because their resources are too expensive.

Picture the guy in Canada sitting with one expensive senior person who has to do everything—research, outreach, deal management. He can't afford to spend weeks researching obscure potential buyers because time is money.

Meanwhile, we can afford to dig deep and have our research team spend serious time finding those hidden gem buyers that others miss. Not because we're better funded, but because our resources cost less.

So while they go wide and shallow with obvious buyers, we can afford to go narrow and deep, uncovering opportunities they'd never find.

The smart approach isn't choosing between local expertise and international reach—it's combining both. Through our Pandea network of 37 specialist firms worldwide, we partner with experts who've completed numerous deals in Europe and the US. This gives us international buyer access while keeping the crucial local expertise that makes the difference between a listing and a sale.

When our Amsterdam partner recommends a South African opportunity, Dutch buyers pay attention because they trust his local expertise and track record.

The truth about international exits

Here's what I've learned: the best way to attract international buyers is through advisors who deeply understand your local market and can position your South African advantages as strategic solutions to global challenges.

International buyers are looking for more than just another generic business opportunity. They seek local expertise, market access, regulatory knowledge, and operational capabilities that they cannot develop internally. Only advisors who truly understand these local advantages can position them as international opportunities.

Your next steps

If you're planning an international exit, resist the temptation to hire international advisors just because they have global brands. Instead, look for local advisors who combine deep South African expertise with proven international networks and track records.

The right local advisor will understand your business within its South African context, position your local advantages as international opportunities, and use specialist global relationships to create genuine competitive tension among qualified international buyers.

Ready to explore how local expertise can deliver the international exit you're seeking? Let's discuss your specific situation and how our proven approach consistently delivers premium international outcomes for South African businesses.

Rick Grantham
Deal Leaders International