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M&A Advisory Guide

Paul Cronin

Paul Cronin

January 26, 2024 ⋅ 3 min read

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Mergers and Acquisitions (M&A) advisory refers to the professional services provided by advisory firms to guide businesses through the process of mergers, acquisitions, divestitures, and other strategic transactions. M&A advisors play a crucial role in helping companies navigate complex financial and strategic decisions. Here's an overview of M&A advisory and how it works from Baton's team of experts.

M&A advisory services

  1. Buy-side advisory: Advisors assist companies seeking to acquire other businesses. This involves identifying potential acquisition targets, conducting due diligence, and negotiating terms to ensure a successful acquisition.

  2. Sell-side advisory: Advisors help businesses looking to sell by providing guidance on valuation, preparing the business for sale, identifying potential buyers, and negotiating favorable terms for the sale.

  3. Mergers and joint ventures: Advisory services may involve facilitating mergers between two companies or assisting in the formation of joint ventures. This includes strategic planning, financial analysis, and negotiation support.

  4. Divestitures and carve-outs: Advisors assist companies in divesting non-core assets or business units. This could involve selling a portion of the business or spinning off a division to maximize value.

  5. Financial restructuring: In cases of financial distress or bankruptcy, M&A advisors help companies explore restructuring options, negotiate with creditors, and facilitate transactions that align with the company's financial goals.

  6. Strategic consulting: Advisors provide strategic consulting services, helping companies assess market trends, identify growth opportunities, and develop strategies to enhance shareholder value.

How M&A Advisory Works

  1. Engagement: The process typically begins with a company engaging the services of an M&A advisory firm. This may be initiated by a company looking to make an acquisition, sell part of its business, or explore strategic options.

  2. Strategic assessment: The M&A advisor conducts a strategic assessment, understanding the client's business, goals, and financial position. This involves evaluating the company's strengths, weaknesses, opportunities, and threats (SWOT analysis).

  3. Valuation: The advisor assists in valuing the business or assets involved in the transaction. This may include financial modeling, assessing comparable transactions, and considering market conditions.

  4. Buyer/seller identification: For sell-side advisory, the M&A advisor identifies potential buyers, while for buy-side advisory, they identify suitable acquisition targets. This process involves market research, industry analysis, and networking.

  5. Due diligence: M&A advisors help clients conduct due diligence, thoroughly investigating the financial, legal, operational, and other aspects of the target or the business being sold.

  6. Negotiation: Advisors play a central role in negotiating deal terms. This includes price, payment structure, representations and warranties, and other key aspects of the transaction.

  7. Deal structuring: The advisor assists in structuring the deal to optimize tax efficiency, minimize risks, and align with the client's strategic objectives.

  8. Documentation and closing: M&A advisors work with legal teams to prepare and review transaction documents. They guide clients through the closing process, ensuring all conditions are met for a successful transaction.

  9. Post-transaction support: Some M&A advisors provide post-transaction support to ensure a smooth integration process or assist with the transition in the case of divestitures.

M&A advisory is a complex and multifaceted field, and the success of a transaction often depends on the expertise and experience of the advisory team. Companies looking to engage in M&A activities should carefully select reputable and experienced advisory firms to guide them through the process.