Mergers & Acquisition (M&A) Advisory – A Value Addition to Your Business

By Veritis

Mergers and Acquisition Advisory

Growth earned over the years might add good value to an organization. But there comes a tipping point where an organization’s market reach or expansion must touch a new high to fight the competition.

This is where the concept of Mergers & Acquisition steps in! Mergers & Acquisition (M&A) strategy has been in demand globally owing to its value addition to M&A firms in their merger or acquisition process. However, surveys say that the success of a merger & acquisition process purely depends on the M&A Advisor you choose to complete the transaction.

A study by the University of Alabama surveyed 3,281 acquisitions and found that 47 percent of successful transactions reported the presence of an ‘M&A Advisor’ in executing the process. Looking at transactions by sector, business owners report a 6-25% rise in their final sales prices with an M&A consulting advisory firm involved.

Various consultants and advisors operate across different facets of the mergers and acquisitions advisory. This spectrum encompasses investment banks facilitating large-scale mergers, legal firms conducting meticulous due diligence and contractual procedures, and change management entities offering guidance during the post-merger integration stage.

M&A advisory services represent the predominant intermediary category within this sector. In the United States alone, numerous small-scale M&A advisory firms vie for a share of the vast USD 3 trillion deal market.

Another study surveyed middle market sellers with an M&A Advisor found that 83% reported a clear match between advisory estimates and the final results.

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What is an M&A Advisory?

M&A advisory constitutes a multifaceted domain encompassing intermediary services in mergers and acquisitions services advisory—predominantly, these services counsel prospective buyers and sellers regarding their merger or acquisition strategies. Additionally, M&A consultants undertake market research initiatives and facilitate capital procurement endeavors tailored to M&A firm activities.

However, from the standpoint of the involved entities, a noteworthy concern arises in the form of M&A advisors’ compensation structure. Principally remunerated through transaction closure, typically via sales commissions, this compensation model inherently instigates an agency problem within the M&A advisory framework.

Why Do You Need an M&A Advisor?

In the complex field of mergers and acquisitions services, companies often seek the expertise and guidance of M&A advisors to navigate the intricate process. Here are several compelling reasons why partnering with an M&A consultant can be advantageous:

1) Strategic Insight and Expertise

M&A advisors bring extensive experience and specialized knowledge to the table. They deeply understand market trends, valuation methodologies, regulatory requirements, and negotiation strategies. Advisors can leverage their expertise to help companies formulate and execute effective M&A firm strategies aligned with their long-term objectives.

2) Access to Networks and Opportunities

One of the primary roles of an M&A consultant is to facilitate connections and access to potential buyers or sellers. Through their extensive networks and industry relationships, advisors can identify suitable acquisition targets or investment opportunities, expanding the scope of possibilities for their clients. Additionally, advisors can help companies access capital markets and secure financing for M&A transactions.

3) Objective Evaluation and Due Diligence

In the heat of M&A negotiations, emotions and biases can cloud judgment, leading to suboptimal decisions. M&A advisors provide an objective perspective, conducting thorough due diligence and evaluating the strategic fit, financial viability, and potential risks associated with proposed transactions. This rigorous assessment minimizes the likelihood of costly mistakes and ensures that deals are based on sound analysis and rationale.

4) Negotiation and Deal Structuring

Negotiating M&A deals requires finesse, tact, and strategic thinking. M&A advisors are skilled negotiators, advocating for their clients to achieve favorable terms and maximize value. Whether it’s price negotiations, deal structuring, or resolving contentious issues, advisors leverage their expertise to navigate complex negotiations and drive successful client outcomes.

5) Managing the Transaction Process

Executing an M&A transaction involves many tasks, from initial deal sourcing to final closing. M&A advisors are pivotal in managing the entire transaction process, coordinating due diligence efforts, liaising with legal and financial advisors, and ensuring compliance with regulatory requirements. By overseeing the logistics and execution of the deal, advisors alleviate the burden on company management, permitting them to focus on core business operations.

The need for strategic guidance, access to networks and opportunities, objective evaluation, negotiation prowess, and transaction management expertise drives the decision to engage an M&A advisor. By leveraging the specialized skills and industry insights of Mergers and Acquisitions companies, companies can confidently navigate the complexities of M&A transactions and achieve successful outcomes that create long-term value.


Useful Link: A Guide Through M&A – Types of Mergers and Acquisitions


4 Ways M&A Advisory Adds Value to Your Business Include:

4 Ways Mergers & Acquisition

1) Manage Internal Resource

Does your organization lack a corporate development team? Don’t worry! M&A Advisory firms can take charge of internal resource planning for executing your acquisition or merger by relieving the burden on your CFO, CIO, or any other executive who typically handles the M&A process.

2) Expertise Support

Doing all alone might not always be possible, specifically with the M&A consulting services. The M&A strategy consulting process involves many critical steps, from planning initial strategies to reaching the negotiation target, closing the deal, and more. You will need some expert support.

Mergers and Acquisitions companies can easily handle this based on their experience in previous projects and market awareness.

3) Effective Handling

The M&A consulting services are more about handling the relationship between the buyer and seller. Because selling involves the owner’s emotional bonding with the company, you must make a very subtle and decent move in handling the proposal or further negotiations.

On the other hand, acquiring doesn’t end with buying and often requires buyer-seller coordination until the buyer gets used to the new environment. All these need effective handling, which M&A Advisory firms can take up!

4) Opportunity Evaluation

Evaluating an opportunity is very important before going ahead with any process. The same is the case with mergers and acquisitions consulting. Hire M&A Advisory firms, which can assist you right from the first stage, i.e., evaluation.

Proper evaluation determines the success and value an opportunity can add to your business.


Useful Link: 5 Key Considerations for Choosing a Right M&A Advisory


A Good Mergers and Acquisition Advisory Services Can Help You:

  • Identify ways to present the merger or acquisition proposal in a better way
  • Bring in a strategic fit between buyer and seller synergies
  • Perform good negotiations either at first instance or in case of revivals
  • Expedite the process depending on your readiness for the deal
  • Find creative ways to get the deals closed in a hassle-free manner
  • Manage key time-consuming processes such as meetings, presentations, and calls
  • Improve the scope of transactions through extended network, market reach, and awareness
  • Attract prospective deals through instant credibility brought in by the Advisor
  • Express and share ideas openly about the transaction to be proposed. Art of negotiation
  • Maintain a long-term relationship with the business partner even after the transaction
  • Avoid the most common bottlenecks that arise in the mergers and acquisitions consulting
  • Implement proven methods, templates, and strategies to attract potential partners for immediate closure of the deal
  • Identify Key Performance Indicators (KPIs) that speak of your business success and trends before discussing them in the sale process.
  • Manage costs incurred for other advisors (such as tax, accounting, legal, etc.).
  • Get additional resources beyond your in-house capabilities, even in complex situations.
  • Get additional support brokerage support to facilitate transactions
  • Align the process with business objectives
  • These are the best ways a good M&A Advisory serves your M&A consulting

Conclusion

In mergers and acquisitions advisory, engaging the services of an M&A advisor emerges as a strategic imperative for businesses aiming to navigate the complexities of such transactions successfully. Veritis, recognized as a winner of prestigious awards such as the Stevie and Globee Business Awards, offers expert M&A advisory services tailored to the unique needs of organizations seeking growth, expansion, or strategic realignment.

Through their expertise, networks, and adept process handling, Veritis adds substantial value to businesses, guiding them through strategic insight, objective evaluation, effective negotiation, and transaction management. By partnering with Veritis, companies can confidently embark on M&A consulting endeavors, knowing they have a trusted partner dedicated to driving favorable outcomes and long-term value creation.

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