Mergers, acquisitions and joint ventures have become a part of the modern economy. They are crucial to the rapid growth of an organisation. The pandemic may have slowed down the markets in 2020, but the economies are regaining their strength in this post-COVID era. It has also created multiple opportunities for big and small businesses. Transactions such as buying or selling a business, obtaining funds for a new venture, merging with another entity and buying out shareholders are expected to be on the rise this year. 

Due to the risks involved in such a transaction, an expert’s opinion will only benefit the organisations involved. Not having someone with experience with such deals can be a disadvantage during negotiations. An experienced transaction advisory team knows the gamut of such deals. They can help mitigate any inherent risks. 

Transaction advisory services mainly include, but are not limited, to the following: 

  • Due diligence (financial, corporate, tax, etc.)
  • Asset valuation 
  • Negotiation support 
  • Dispute dissolution
  • Project management 
  • Operational readiness and day one to hundred planning 
  • Compliance Services (Audits, tax filings, etc.)
  • Risk assessment and crisis management
  • Post-closing services 

What is the importance of transaction advisory services?

Partnering with a firm that provides transaction advisory services can prove beneficial in many ways. They not only help their clients with an ongoing M&A, but they also help them identify potential deals. They help their clients through the entire transaction lifecycle, making the whole process smooth and stable. 

Opting for transaction advisory services before bringing about any significant changes in the organisation can reduce any negative surprises in the future. These services also increase visibility and help the concerned parties understand the key issues of the deal. The certainty of the deal and the speed at which it must also be closed become apparent. 

The sellers can also benefit from transaction advisory services. Valuation of the entity in question will help them get a fair deal. They will also know the business/entity’s actual worth, consequently helping them during the negotiations. 

How can one benefit from transaction advisory services?

Few simple questions will help decide if one needs transaction advisory services for their business. If there is any major transaction in the foreseeable future, the owners must assess the following: 

  • Plans for the future: If the owners wish to buy, sell or expand their business, it is advisable to work with a transaction advisory team. Start-ups can also benefit from such services. 
  • Earnings and expenses: Assessing the organization’s financial situation in question is a prerequisite to any successful business deal. The concerned parties must calculate their EBITDA (Earnings before interest, taxes, depreciation, and amortization), analyze it, and compare it with the industry. Expert opinions on the EBITDA can prove valuable while carrying out significant business transactions. 
  • Valuation: An entity’s valuation is not only determined by its material assets, but also by its operational, financial, and legal factors. The geographic location and market share also contribute to it. Hiring a transaction advisory team will help the buyers understand what they are paying for, and ensure a fair price for the sellers.
  • Financial liquidity: The buyers must ensure that their business has enough funds to support the ongoing transaction. In cases of uncertainty, owners can benefit from the advice of experts. 
  • Market strategy: Before investing in any business, one must assess the market. Knowing the competitors will help during the long-run. A good transaction advisory team will also help their clients discover their USP and set a competitive price while ensuring profits.
  • Analyzing the options: Is the current transaction the only option? There might be better opportunities in the market that may have been missed. A firm with experience in such services can help identify such opportunities and save their clients from an unremunerative deal.

Summary

Transaction advisory services make dealings and negotiations easier during any major transactions. During mergers, acquisitions, joint ventures, or any liquidation deals, the concerned parties, both buyers and sellers, can benefit from transaction advisory services. An experienced team will help them avoid such deals’ common pitfalls. It will save time, money, and effort.