Businesses are always in search of opportunities for expansion and growth. There is always more than one clear way to get bigger, which are internal expansion and external expansion. The internal expansion involves a firm making changes/ evolve to new technology, acquire more assets, improve its supply chain, and more.
However, external expansion is all about acquiring or getting merged with good players in your industry to elevate your customer reach, improve your efficiency, get hold of their assets to enhance your market presence, and more.
What Are a Merger and Acquisition?
A merger or acquisition is a way of expansion for both small and large companies. By combining yourself with other players in your industry, you can increase your company’s valuation. The additional value achieved through the merger or acquisition process is jointly called synergy. However, you must have heard people often denoting it as takeover, merger, acquisition rather than synergy.
What Is The Role of The Corporate Advisory M&A Firm in The Process?
The synergy process is an exhaustive one, involving a lot of research, paperwork, calculation, and more. The merger or acquisition process can be intimidating for someone that is new in the market and looking for expansion. But it is equally intimidating for the big players, as the bigger the merger bigger would all, the more work they would have to do. Since not many companies have the kind of efficiency and knowledge in-house, they look up at corporate advisory m&a firms that can reduce their workload and facilitate them with expertise for a fee.
Types of Corporate Advisory M&A Firms
Investment backs carry out transactions involving a huge sum of money in areas such as underwriting. They act as a financial advisor for many institutes and would sometimes play the role of an intermediary.
Furthermore, investment banks also facilitate corporate reorganization, which includes managing the merger and acquisition work and negotiation. They would also handle the legalities and accounting issues, which are also outsourced sometimes to affiliate companies or certified experts. Their role is to provide financial advice to their clients.
Corporate laws are difficult to understand, and there are several legalities involved during mergers and acquisitions. Especially if you are merging or acquiring a company outside your country borders, the work increases by a great magnitude. To manage these legalities and do all the special legal handling, law firms are often hired by the corporate houses.
Audit and Accounting Firms
Auditing and accounting firms specialize in auditing, accounting, and taxation. They help you evaluate assets, conduct audits, advising you on taxes, and more. Cross-border mergers and acquisitions involve a lot of tax implications. In addition to this, audit and accounting specialties, the companies would manage other financial aspects of the deal as well.
Consulting and Advisory Firms
Usually, corporate advisory m&a firms would offer you end-to-end services. They would have all the above-mentioned three departments in-house and would not require you to seek out any other solution providers. These firms would research the right companies for merger and acquisition and would also initiate the talks. Following that, they would do all the financial and legal handling for you too. They would also have an active role in negotiation.