What is an M&A advisory firm?

Merger and acquisition (M&A) advisors provide strategic advisory services for corporate mergers, acquisitions and other types of financial transactions as well as assist public and private corporations in raising equity and debt in the capital markets.

These corporate finance advisory firms facilitate mergers and acquisitions, private placements and corporate restructuring.

What do M&A advisors typically do for a company?

The M&A advisor provides the match making service of bringing together buyers and sellers of businesses. As part of this effort, an M&A advisory firm’s services typically include:

  • A valuation of the business
  • Creation of the marketing material
  • Marketing the business
  • Conducting initial interviews and discussions with prospective acquirers
  • Providing strategic insights and negotiations skills on behalf of the client
  • Assisting with due diligence
  • Resolving transaction issues throughout the process

What’s the difference between a bulge bracket investment bank, a middle market firm and a business broker?

Although there is no strict definition, generally speaking, business brokers represent smaller clients with transaction values typically less than $5 million.

Middle market firms tend to focus on companies where the enterprise value of the transaction is between $5 million and $75 million.

Bulge bracket investment banks do not normally work on transactions less than $50 million unless there is a strategic rationale such as a follow-on opportunity.

What’s the difference between an M&A advisory firm and an investment bank?

The key differentiators between a firm designated as an investment bank and a firm that operates as an M&A advisor is that an investment bank – in addition to performing an M&A advisory role – may also:

  • Advise companies on matters related to the issue and placement of stock
  • Act as an underwriter or agent for corporations and municipalities issuing securities
  • Maintain broker/dealer operations
  • Maintain markets for previously issued securities
  • Offer advisory services to investors.