Mergers and acquisitions (M&A) refers to the process of companies consolidating with one another through a variety of transactions including mergers, acquisitions, offers of tender, consolidations, asset purchase and management buy-outs. An consultant M&A provides advice on these types of transactions which are often highly complex and require consideration of many factors to be completed successfully.
The purpose of mergers and acquisitions is to provide more value for the shareholders of each of the individual companies when they are combined or otherwise restructured. The M&A process typically involves large sums of money and considerable paperwork to satisfy the requirements of due diligence, legal requirements, government regulations, legalities and accounting processes. An M&A consultant may be required that has specialized knowledge in each of these areas as well as the specific industry in which the companies to be merged operate. They will facilitate the process by guiding their clients through the myriad decisions that need to made and requirements to be met for a successful conclusion.
Each of the following stakeholders may provide consultants to the M&A process:
• Investment Banks: carry out the financial transactions that are required for the large amounts of capital that are typically involved. They are the financial advisers for clients, often playing the role of intermediary between two companies, and may also underwrite the capital raising required.
• Law Firms: deal with the often complex legal requirements involved in the M&A process, particularly where the companies involved cross national jurisdictional boundaries. Some law firms specialise only in M&A services and provide consultants to clients as required.
• Audit and Accounting Firms: specialize in auditing, taxation and accounting functions. They have expert knowledge in evaluating assets, conducting audits to verify a company’s stated financial position and any taxation requirements required to complete the transaction.
• Consulting and Advisory Firms: are often the source of consultant M&A staff that specialise in this field. These firms will advise on the process from start to finish and have consultants in place with wide experience in a range of industries. They provide the acquisition strategy to be used, screen potential candidates, provide due diligence services to minimize risk and will provide advice on valuation of assets to ensure that clients are not overpaying for a target company.
Because of the increasing complexity of M&A transactions there are many well known Wall St firms that specialize in providing consulting roles and because of the sums involved are often paid significant fees depending on the size and worth of the companies involved.
