When two companies enter into a merger and acquisition (M&A), drastic organizational and financial changes may occur. As such, it is highly recommended to engage in M&A consulting to ensure a successful and beneficial M&A.
What is M&A consulting?
M&A consulting is the service of advising or assisting clients on the changes resulting from a company merger or acquisition.
Its goal is to ensure the success of the M&A by preparing the company (either the acquiring company or the target company) for the opportunities and the problems that may come along the way. M&A consulting also ensures that all Canadian laws on M&As are observed.
Before an M&A
M&A consultancy starts when the idea of an M&A is first raised.
On the side of the buying or acquiring company, M&A consultancy begins by guiding a company on whether an M&A is necessary or appropriate.
On the other hand, a target company (the company being acquired) begins its M&A consultancy to check whether the offer of an M&A is worth considering or not.
Valuation
M&A consultancy may even begin as early as the valuation of the acquiring company.
In a valuation, the company looks at its current standing and evaluates its internal problems and external factors. It may then look for approaches that it may take on the issues that it currently faces.
It also includes preparing all necessary documents to prepare itself for the negotiations. These documents may include incorporation documents, financial statements, tax filings, etc.
M&A strategy
M&A consultants help companies in creating a good M&A strategy.
This strategy must be in line with the company’s overall goal or the objectives that must be attained by the M&A. It must also balance out or minimize the underlying risks when going through the process.
M&A consultants will also direct the company in forming the M&A road map and timeline. This will help the company to save time, manpower and financial resources.
If M&A is the best option to go with, then the company will now look for target companies to merge with or to acquire.
Screening
Choosing the right company to merge with or to acquire is best handled by the M&A consultant along with the corporate M&A team.
The wide resources and connections of the M&A consultant may also be used in the search for potential investors, buyers, or sellers.
Negotiation
Once both companies have agreed (which may be non-binding at this stage) to pursue an M&A, they will try to come up with a deal that is beneficial to both parties.
At this point, the job of the M&A consultants on both sides is deemed important, along with the M&A team of the two companies.
Ultimately, securing a good deal for the company it works for is the best indication that the M&A consultant has been effective. It will be during the negotiation that the consultant will be put to action.
Based on their expertise on M&As and its legal framework, it will be their job to guide clients on how to argue with the other party in protecting its interests. M&A consultants are also careful in dealing with the other party during the negotiations to avoid the rejection of the M&A offer.
Due Diligence
The process of M&A continues up to the conduct of due diligence. This process is simply the rigorous analysis of the other party that may affect the success of the M&A.
Watch this video to learn about due diligence and how it is effectively conducted:
Talk to a lawyer in your province to find out how they can be involved in M&A consulting. If your business is in Vancouver, for example, contact one of the best mergers and acquisitions lawyers in British Columbia as ranked by Lexpert.
During an M&A
If everything is set up and in order, the acquiring company and the target company will now enter into a legally binding contract. This signifies the perfection of the contract of M&A, which comes with it the responsibility of both parties to uphold the contract.
After an M&A
However, the work of the M&A consultant may even extend until the post-merger integration. While everything looks good on paper, the integration of the two companies would still need polishing.
Parties must also be cautious at this stage, since the success of the merged or acquired company will depend on how smooth the integration will be.
Can a lawyer be an M&A consultant?
Aside from being part of the corporate team handling the M&A, a lawyer is one of the best professionals to have as an M&A consultant.
They are well-versed with Canadian competition law which guides the M&A process. They are also knowledgeable in other fields of law involved in M&As, such as:
- Corporation law
- Taxation
- Securities regulation
- Labor and employment
- Intellectual properties
Also, when things go south, and litigation is the best remedy to take on, lawyers would be able to advise clients on the effects of suing and/or being sued.
The lawyer would also be able to represent the corporation in court if it finally decides to pursue litigation.
What do you do as an M&A lawyer?
Generally, M&A lawyers guide companies with internal or organizational legal counselling on the merger and acquisition contracted by the company.
M&A consultancy may also be included as one of the main jobs of M&A lawyers, in addition to the other services they provide their clients.
Apart from M&A consulting, other responsibilities that M&A lawyers have may include:
- Representing the company in all negotiations at any stage of the M&A – before or even after
- Regularly refer to Canadian laws during the perfection and integration of the M&A
- Direct the parties on how to comply with the regulatory framework set by the Canadian government
To know more about M&A consulting or to hire a lawyer as an M&A consultant, reach out to any of the Lexpert-Ranked mergers & acquisitions lawyers in Canada.