Most companies, whether they are a buyer or a seller, lack the internal resources to undertake sophisticated mergers and acquisitions on their own. It is of prime importance to have the right advisors on your side. While many believe that only an investment bank can fulfill this role, Merger and Acquisition (M&A) advisory firms can also provide high quality advice on corporate mergers, acquisitions, divestitures and as well as debt and equity financing.
Unlike most investment banks, a well reputed M&A advisory firm will get involved more deeply in understanding the business and its long range goals. This can lead to a more holistic funding or merger solution that addresses the long term needs of the business. Furthermore, during the actual merger or acquisition, an M&A advisory firm can provide a host of allied services.
How can an M&A advisory firm work in your benefit?
A reputed M&A advisory firm will:
Provide industry knowledge and facilitate market contact, making it easy to spot opportunities and assemble teams to execute a deal in your favor.
Identify appropriate buyers and will implement a sale to generate the best price for our client.
Identify other businesses that offer a good strategic fit and assist you with acquisitions/alliances that allow you to maintain and build your competitive advantage.
Address a wide range of issues, including refinancing, cash-flow forecasting, and business plan development.
Ensure that the entire transaction process-from valuation to negotiation and completion-is successfully completed.
How to choose the right M&A advisory firm?
M&A advisory firms differ based on the monetary value of the mergers and acquisitions handled by them. They are classified as bulge bracket firm (transactions greater than $50 million), middle market firms (enterprise value between $5 million and $75 million) and business brokers (transactions less than $5 million). While choosing an M&A advisory firm look for the following criteria:
Reputation: The M&A firm should have a strong reputation in the financial world. If in doubt, ask for client referrals and double check on it.
Experience in mergers and acquisitions: Always seek out an expert in the M&A field with a collective experience in mergers & acquisition, finance, banking and entrepreneurship. An expert with deep industry knowledge, though expensive, can prove to be worth it in the end.
A proven workflow process: It is essential that the firm follow a dedicated workflow process that will ensure in smooth and easy transactions.
Customized solutions: Look for a firm willing to customize their services to provide specific solutions that address your immediate and long-term needs.
A large lender-base: A firm with a large lender base is preferable as it can provide differentiated financing solutions for the merger and acquisition process.
All said and done, a M&A advisory firm should foster transactions where the chemistry and compatibility between the parties is positive and sustainable. The job of the M&A advisor is to balance the valuation considerations with long term growth objectives to ensure the right deal gets done for all parties.