Everything Banks Need to Know About M&A Advisory and How It Works


Business people shaking hands. An M&A advisory firm essentially acts as a middleman in a business sale transaction

Any financial institution that is considering or preparing to make a transaction that involves the selling, buying or merging businesses should consider working with outside advisors, including investment bankers, attorneys, and integration firms, to help navigate the complex world of mergers and acquisitions (M&A). An M&A advisory firm essentially acts as a middleman in a business sale transaction, and represents the seller or buyer to help ensure that the transaction is performed fairly, legally and without complications.

What Does M&A Advisory Offer for Banks?

Most banks strive to expand and grow their market share over time. This growth can be achieved through external expansion or internal organic growth. Corporate restructuring is one of the most effective ways that financial institutions can achieve accelerated growth through mergers, acquisitions or takeovers. An M&A advisor can help facilitate this process by guiding bank leaders through a series of multifaceted decisions. The main objective of an M&A advisory firm is to successfully complete a smooth transaction.

Below is a look at some of the top services that an M&A advisory firm can offer to banks.

Financial & Intellectual Property Advisory

M&A can be a challenging endeavor. Investment bankers and attorneys who specialize in M&A can help clarify each step of the process and assist with negotiations to help maximize the shareholder’s value. M&A advisory firms have extensive experience with the M&A process and possess strong negotiation skills. Investment bankers and attorneys may assist with identifying strategic partners, vendors or buyers that meet specific criteria. They can also help bolster intellectual property and provide essential services like intellectual property consulting.

Integration & Transaction Services

Review of investment plans and funds for the purchase of assets and real estate

M&A advisory teams work directly with bank leaders to maximize value through integrated services that combine corporate finance, transaction advisory and performance management. An M&A professional can help facilitate a smooth transaction, including secure distribution of documents, review of agreements and calculation of net working capital.

IT Due Diligence

Prior to a business transaction, potential buyers perform due diligence, a thorough analysis of a commercial business. Due diligence allows a buyer to confirm important information about a seller, such as finances, contacts and customers. Due diligence in the areas of tax, financial, operational, commercial, IT and cybersecurity can help organizations determine if a strategic merger or acquisition is a good fit, as well as the right targets to support growth. Outside advisors also review contracts to understand which vendors will best meet the new needs of the business and check on all contract terms and exit penalties. Due diligence also includes evaluating security systems and infrastructure health to avoid unforeseen delays and expenses. Due diligence is not just recommended but considered an essential activity in merger and acquisitions transactions.

The Advantages of Acquiring M&A Advisory Services

Mergers and acquisitions involve major financial decisions and few banks are prepared to take on this process alone. M&A advisory services can provide financial institutions with a wide range of benefits to help yield the best outcome possible. Working with an experienced M&A advisory firm can help drastically improve the odds of reaching an optimal deal with a structure that best suits the bank’s needs.

Some of the top advantages of acquiring M&A advisory services include the following:

Gain Awareness of Business Valuation

Business valuation refers to the processes and procedures used to estimate the economic value of an owner’s interest in a business. In other words, this process is used to determine the price that a buyer or seller is willing to pay or receive to complete a business deal. An M&A advisory firm can assist banks by helping them gain greater awareness of business valuation.

Increase Competitiveness of Your Deal

competitive advantage analysis concept on clipboard

Hiring an M&A advisory firm can give businesses a competitive advantage. Sellers have more negotiating leverage when prospective buyers believe that they are competing against other bidders. Even if this is not the case, buyers may consider that there are competitive bidders for the transaction which drives up its valuation. M&A advisory firms can help businesses increase the competitiveness of deals which ultimately means more money for sellers.

Protect Assets and Investments

No transaction is without risk, and businesses must find a balance between maximizing value and minimizing threats. For many financial institutions, a key concern deals with protecting assets and investments as deals close. There are a variety of proven tools and techniques used by M&A advisory firms that can help business leaders meet their M&A goals and achieve success without sacrificing their vital assets and investments.

Speak With An M&A Advisory Firm Today

Mergers and acquisitions can be a viable option for businesses searching for ways to meet growth and earnings objectives. Working with a trusted M&A advisor can result in a successful sale, merger or acquisition transaction and provide businesses with greater peace of mind throughout the process.

Professional M&A advisory firms offer a wide array of services to meet the unique needs of banks of all sizes. To learn more about what banks need to know about M&A advisory and how it works, reach out to the experts at Hartman Executive Advisors.


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