There are many things to consider when selecting a Consultant M&A. You should ask yourself several questions, including how many years of experience a consultant has, whether they have a relevant qualification, and what their fees are. The work environment and working relationship should also be considered since they will impact the outcome of your transaction. Ultimately, it is your business and your success that should be the primary concern. A good M&A consultant should be able to protect you from deceptive offers and other risks.
Experience
While choosing a target company for an M&A may seem like an easy task, it is often not. Companies tend to pursue targets opportunistically, which contributes to their high failure rates. Consultants at BCG work with their clients to develop strategic, repeatable M&A processes. Some companies pursue M&A opportunities because they suddenly have appealing prospects, cash surges, or winning a big game.
Before starting the M&A process, a consultant will need to independently value the company. An independent valuation not only provides the owner with price guidance but also helps the advisor understand the company better. Private companies must have clear and justified assumptions, especially when compared to public companies, which have tangible asset values attached to traded stocks. Alternatively, private companies must be valued using a discount cashflow valuation or book value analysis.
While lawyers and accountants play an important role in the M&A process, it is the role of an M&A consultant to act as a bridge between the seller and buyer. Due diligence, which often goes beyond the data room, involves a physical assessment of the company’s assets and operations. Founders tend to be nervous about this phase of the process, so an M&A consultant needs to be a strong channel of communication between the two parties.
Qualifications
There are several qualifications for M&A consultants. This role requires a broad understanding of business and a strong analytical and communication skill set. M&A consultants often need to work in a team environment and manage multiple projects simultaneously. The right candidate will be able to demonstrate their skills and expertise and be well-respected by their peers, clients, and employers. Listed below are some of the qualifications for consultants in this field.
Expert-level knowledge of finance, strategy, and accounting is required. Knowledge of global markets, business sense, and sound judgment are important. Advanced mathematics is also required. Experience with mergers and acquisitions is a distinct advantage. A bachelor’s degree in a related field, as well as a law degree, is recommended. An MBA is not necessary, but it can help land a job in this field.
Fees
Consultant M&A usually charge a minimum retainer, and they often add additional fees for services like deal financing. Although true M&A consulting experts don’t charge by the deal, consultants typically use outside vendors to help them with M&A services. The fee for their expertise may be based on the valuation of a target company, deal flow identification, and financing origination. Fees for underwriting services may also be included in the fee.
