What is an M&A Advisor?

Conducting M&A transactions requires a thorough analysis of the business, which requires the involvement of specialists. In this article, we will analyze the responsibilities of the M&A advisor.

M&A advisor: who is it?

Mergers and acquisitions (M&A) are an integral part of business processes. In addition to the companies directly involved in the transaction, they involve some third-party organizations providing consulting services.

A successful sale of a company must be prepared and carefully considered. In the beginning, there is a detailed company analysis and a comprehensible evaluation. Experts believe that up to 50% of the success of M&A transactions depends on advisors. The activity of the advisor in this field is very broad because buy-outs, takeovers, mergers, spin-offs, carve-outs, or even cooperations are possible in the course of the process. Especially when private equity also plays a role in management, such a transaction always has an emotional component that a consultant should keep in mind.

Basic functions of the M&A advisor

The success of M&A depends primarily on the professional experience of the advisor, his ability to anticipate developments and respond quickly to possible changes in the process of agreeing.

Supporting M&A transactions is usually not limited to preparing a report on the results of the inspection and writing a contract of sale. these elements are basic, but usually, the support of the agreement includes other elements:

  • initial communication on key terms of the agreement
  • preparation of a memorandum of understanding or other similar documents,
  • tax and corporate structuring of agreements,
  • coordination of conditions of joint activity and instruments of joint control,
  • elements of integration after the completion of the agreement.

Therefore, it is advisable for the legal adviser to develop and agree with the client and the contractor a roadmap of the agreement from the very beginning, in order to avoid complications and delays in the future. It is not necessary to formalize a single document, but the vision of the main complications that may affect the implementation of the agreement, in particular in the context of time and additional costs, and which should be reflected in transaction documents, should be discussed in advance.

M&A advisor and M&A broker: what is the difference?

While the company broker specializes exclusively in finding a buyer, the M&A advisor provides support with all questions relating to the sale and purchase of companies. He not only mediates between buyer and seller but is responsible for the entire sales process from the preparation phase to the signing of the contract.

A key difference between corporate brokers and M&A advisors lies in the approach. During a transaction, the area of ​​responsibility of an M&A consultant includes the preparation of a company valuation, the analysis of data, intensive advice in all phases of the transaction up to the support of the due diligence and the negotiations in the preparation of the purchase contract. The M&A consultant has higher specialist skills in the area of ​​business administration and accounting or a qualification in the areas of taxes and law. He is the holistic contact for all sales-related and associated issues.

The company broker, on the other hand, also creates sales documents, but his service is limited in particular to finding a buyer. Accordingly, service is more a “matching” of seller and buyer than advice during the sales process. In addition, the company broker does not provide any more in-depth consulting or analysis activities for the seller. Overall, it can be stated here that the M&A advisor accompanies a transaction from A-Z, whereas the corporate broker usually only plays a role in the initial phase.