Merger and Acquisition Consulting
Are you not familiar so far on the legal terms of merger and acquisition consulting?
Merging of two companies to become a single entity is a very complicated process and needs a lot of consultations from persons who are expert on the field of merger and acquisition issues, therefore familiarizing merger and acquisition consulting is a must to your business.
Familiarizing the terms of Merger and Acquisition
In the field of business, there are certain processes that are too complex to handle simply by the business itself, just like in the case of merger and acquisition. These two business processes are required to be handled by the experts due to the complexity of the issues. Merger and acquisition takes place if there’s a plan for two businesses to merge into one entity or for one business to take custody on another business; so don’t be confused between two processes since they have separate concerns. Let’s familiarize each of them and why a business needs proper consulting about the procedures.
- Merger is the term applied if two companies join together into one legal business entity through voluntary means. According to methodframeworks.com, there are two types that fall on this complicated business process; horizontal integration and vertical integration. Horizontal integration is the term used when two competing businesses united into one entity; while vertical integration is called when the business are either customers or suppliers to each other.
- On the other hand, acquisition is simply to have a hold over another business and be in charge of the company records, assets, and voting shares (should be more than 51 percent).
Why Merger and Acquisition Consulting is Important?
Now that you have a clear understanding about the two complicated business processes, maybe you are wondering how important is consulting for the realization of the procedures. This is the point where Merger and Acquisition Consultant (also referred as M&A advisor) comes out to the scene. A company needs to hire a person that has exceptional expertise in handling the process of merger and acquisition to make sure that the whole process is flowing smoothly with accordance to the law of the state.
The main role of M&A consultant are the following:
- To represent the business on the negotiation about the plan for Merger and Acquisition with potential sellers or buyers
- To provide expertise in terms of choosing the best legal structure for the combined entities
- To analyze the fair market value of the merger or acquisition
- To create a business model that shows the benefits of the merging of two legal firms
- To ensure the legality of the whole transaction by finalizing the terms and conditions
Tips in Choosing the Right M&A Consultant
In choosing the right M&A consultant, the first thing to consider is its reputation in the industry and has a good track record in performing the task. There are several M&A consulting companies you can choose from, but only few of them are trusted and legitimate. So be careful when you’re doing the search and make use of the best sources like the internet or yellow pages.
Most M&A consultants are CPA’s (Certified Public Accountant), economists, and attorneys that specialize in M&A law. Therefore, before dealing with these advisors you should ask them to show you some certifications or licenses that prove that they are allowed by the state to handle such complicated business processes for legality sake.