What is M&A

Mergers and acquisitions or “M&A” involves the sale of a company, business division, or assets to another company in an attempt to enhance shareholder value. M&A is a critical part of many corporate strategies as it is used to increase growth or can be used to reduce risk and protect shareholder value. In order to complete successful M&A transactions, companies usually enlist the help of investment banks on both the sell-side and buy-side of the deal.

Sell-Side M&A Advisory

A sell-side M&A advisor will work closely with the selling company in order to effectively market its sale. One of the main responsibilities of the sell-side M&A advisor is to produce a Confidential Information Memorandum (“CIM”) or Offering Memorandum, which describes the company in detail, highlighting the firm’s strengths, growth opportunities, and why it would make a good acquisition. The sell-side advisor will also play a critical role in identifying qualified buyers and contacting these buyers in order to complete a sale. The sell-side M&A advisor’s objective is to maximize the consideration paid for the company and to meet the seller’s additional goals. These additional goals may include retaining an equity stake in the acquired company, having a continued role in the company such as a consulting arrangement, retaining a board seat in the company, etc. Sell-side advisors also help facilitate the transaction in many ways, including helping the seller and buyer navigate due diligence, structuring and negotiating the transaction, etc.

Buy-Side M&A Advisory

A buy-side M&A advisor will assist a company in identifying appropriate targets to acquire and complete the purchase in an efficient and orderly manner. The main objective of the buy-side M&A advisor is not only to make sure its client does not overpay for a target, but to ensure the target fits within the acquirers overall corporate strategy and growth objectives. The M&A advisor seeks to complete a transaction that will build shareholder value for its client long after the transaction is closed. The buy-side advisor will also help the buyer navigate due diligence, structure and negotiate the transaction, among other tasks towards the completion of a successful transaction.