M&A advisor is a key figure in such deals. He specializes in corporate law /support of M&A transactions, advises clients on various aspects of the law that arise in the process of commercial transactions. Here is more about advisors` responsibilities.
The purpose of the M&A advisor
Starting your own business, planning profitable investments is becoming increasingly difficult due to high competition in the economic sector. High investment risks, lack of well-prepared offers for purchase, misunderstanding of market trends, and distortion of information hinder the formation of an attractive investment climate in the world market. That is why, even in developed markets, the purchase and sale of business owners attract professionals who can conduct all stages of the transaction.
What does he do?
In a broad sense, the advisor provides support for the agreement and compliance with the interests of all stakeholders – both sellers and buyers of the business, namely:
- estimates the value of assets of enterprises;
- searches for buyers of enterprises or other assets;
- accompanies and structures agreements at all stages – from the beginning of negotiations to the end;
- organizes the work process of all parties to the agreement, including consultants and representatives of the parties, to complete transactions.
In other words, the advisor becomes the manager of all the processes that accompany the agreement. Thus, its functions include assisting in the development of strategy and participation in negotiations in the interests of the client, advising on all issues on the optimal structure of agreements, and, finally, assistance in preparing the documentation necessary for a successful conclusion of the agreement with lawyers and other professionals. stakeholders involved in the process.
Pricing and preparation for sale
The first step in selling is to determine the true price of the business. An advisor who is an independent expert will be able to objectively evaluate the company. Unlike interested owners, he can evaluate the business with the eyes of the buyer, which will help determine its fair market value.
An independent advisor will provide recommendations on how to conduct a financial analysis of the company and will help to do it well.
Customer search support
The second stage of the advisor's work is, relatively speaking, the creation of demand for the asset offered for sale. It is necessary to identify potential investors and competently formulate an offer. That is, there are three components: direct identification of interested investors, preparation of presentation materials, and presentations of the proposed asset. At this stage, the name of the company and any information that may indicate the company is not disclosed.
If the presentations are of practical interest, the advisor will enter into confidentiality agreements with stakeholders to prevent espionage and raiding. And after that, they will be given all the necessary information to study in a secure virtual data room.
Completion of the search for buyers is to obtain indicative price proposals from stakeholders, analysis of information, and preparation of relevant comments and recommendations by the advisor for the owners of the business for sale.
Support of concluding the agreement
Only after that, the work of the sales adviser comes to an end – directly to the support of the agreement. He makes a kind of presentation for potential owners – examines both the proposals themselves and the business reputation of potential investors (because transactions can be long in time).
Such information is needed especially when two or more proposals have been received and the best one needs to be determined, taking into account the reputation of investors. In addition, under such conditions, the advisor will try to increase the cost of sales.