Hire the Top 3% of Freelance M&A Consultants

Business Owners Considering Strategic Opportunities Need Mergers and Acquisitions Consultants

Despite a challenging economic environment, 2022 saw a return to robust mergers and acquisitions (M&A) activity, with transactions nearing pre-pandemic levels, according to The 2022 M&A Report from Boston Consulting Group. No matter which way the economy shifts, high demand for M&A specialists is likely to continue throughout 2023 and beyond.

It can be difficult to find the right M&A specialist for your project because it’s important to identify someone who not only has expertise, but also has familiarity with your specific needs, which can vary based on your sector, the maturity of your company, and whether you want to buy or sell—and why. While one of the most common M&A scenarios involves a retiring owner/operator wanting to sell their business, that’s just one of a myriad of reasons a business owner may want to pursue strategic M&A opportunities. Other common reasons include acquiring a related or complementary business, merging with another business (which can include seller notes, stock for stock, and other equity considerations), or rescuing a distressed business that might otherwise fail. In each case, there may be nuances that only a qualified M&A consultant—who’s worked on similar use cases—will understand fully.

In most instances, if your company is anticipating—or even just considering—any kind of M&A transaction, you’ll need to hire an expert from outside your business, since most stakeholders typically prefer an impartial specialist to help drive the best M&A value, process, and transaction structure.

This hiring guide offers insights into how to hire the best M&A consultant for your particular needs.

What attributes distinguish quality Mergers and Acquisitions Consultants from others?

When you’re looking for a specialist, experience is the most important factor in ensuring a successful M&A process. Ideally, your candidate will have a minimum of 10 years of experience in executing M&As generally, as well as specialized sector experience relevant to your company or goals. The best M&A consultants are also creative and adaptable, as every M&A transaction has unique circumstances, stakeholders, and process nuances.

In general, pay attention to a consultant’s experience in executing transactions, including their demonstrated ability to find the right counterparties—that is, prospective buyers or sellers, or companies seeking a merger—to close a deal. In addition to track records of brokering deals, candidates should have experience forecasting three to five years of financials and know how to use the best methods and data sources to drive accurate, attractive valuations for business owners.

How can you identify the ideal Mergers and Acquisitions Consultant for your project?

In addition to the requisite level of experience generally and substantial experience with your sector and use case specifically, a qualified M&A consultant must possess a variety of hard and soft skills.

Technical skills include:

• Financial modeling – M&A consultants should be proficient at building financial models to analyze and evaluate the financial implications of potential deals.
• Valuation – To determine the fair market value of a company, M&A consultants should be able to use a variety of valuation techniques as situationally appropriate.
• Financial analysis – M&A consultants need to perform in-depth financial analysis of a company’s financial statements to identify strengths and weaknesses.
• Corporate finance – An M&A consultant’s familiarity with the intricacies of concepts such as capital structure, cost of capital, and financial planning and analysis is key.

Soft skills include:

• Strong communication – The consultant will be working directly and extensively with management to articulate complicated concepts, as well as understanding and incorporating client feedback.
• Research and presentation expertise – The consultant will need to perform a great deal of company- and industry-specific research as part of the M&A underwriting to facilitate a successful process. They’ll also need to be able to share their results in clear, easy-to-comprehend formats.
• Creative critical thinking and writing – The consultant will need these crucial skills for presenting and supporting an argument persuasively, as well as for explaining the methods used.
• Project management – The consultant will need good organizational skills, as any M&A transaction involves a large number of stakeholders and counterparties who will need to be coordinated at various stages.

Depending on your M&A situation, it may make sense to consider beginning the hiring process early—well before you sign a letter of intent (LOI). Many businesses hire an M&A expert initially to investigate opportunities to buy competing or complementary companies, to outline what that acquisition process would look like, and/or to assist in developing a list of target companies to acquire. Likewise, sell-side companies may hire M&A consultants to take similar steps from their side, such as identifying prospective buyers.

How to Write a Mergers and Acquisitions Consultant Job Description for Your Project

First, clearly describe your business sector and goals, including the stage you’re at in the M&A process and establishing whether you’re buying or selling a company. This will help candidates with relevant experience self-select based on their knowledge base, as well as give them a better sense of the nature of the project.

Next, list the documents you think the M&A specialist may need to use. At this stage, you don’t need to have these materials on hand and ready to go, but think about the steps necessary to acquire them and at what point in the data collection process you’ll want the M&A expert to step in. It’s also a good idea to compile a list of stakeholders the consultant will work with. Including information about the scope, intensity, and length of the work you need performed will help both you and potential candidates understand what realistic project deadlines and budgets might look like.

Finally, be clear about your expectations in terms of qualifications and experience, including any requirements for advanced or specialized expertise. Be specific about what you need.

What are the most important questions to ask when interviewing Mergers and Acquisitions Consultants?

By the time you’re ready to interview candidates, you’ll understand their education and prior positions, so you can delve directly into their experience and how it applies to your particular situation. Here are questions to consider asking candidates:

Can you describe your experience working on M&A deals?

Ask how recently their latest deal was executed and whether they have experience working on deals similar to the type you wish to transact. Expect each candidate to detail how they approached the case and pay attention to how detailed and specific their approach seems. The more familiar they are with your kind of use case—and the more recent their experience—the better suited they will likely be to your project.

How do you approach financial modeling for M&A deals?

Financial modeling is one of the most important tools for an M&A advisor. You should inquire about how a candidate would approach modeling your business, specifying the types of deliverables you expect and investigating the candidate’s relevant experience. Don’t forget to ask them about their software skills too: Typically, Microsoft Excel will be the primary tool for M&A financial modeling, and deliverables will be provided in Excel or Google Sheets formats.

Can you describe your approach to valuation?

It’s important to understand how the interviewee would calculate the valuation of the relevant business, especially if it’s in a niche market such as fintech or the startup space. If you’re looking to buy a software company, for example, be sure your M&A expert understands how to value intangible assets and is aware of other industry-specific nuances. While you may not be familiar with all of the available valuation techniques, the candidate should be able to explain what approaches they would use and why.

How do you conduct due diligence in M&A deals?

Nearly all processes will involve due diligence once a purchase or merger agreement has been signed. The industry/sector, business model, stage of the company, and other factors will drive specific diligence items, but in general, you should expect the due diligence process to cover legal, financial, operational, and other key business lines of inquiry.

What steps do you follow in your workflow?

While no two deals are the same, a typical M&A process workflow typically includes the following steps:

Step 1: Define objectives and stakeholders.

• Establish the purpose of the transaction—for instance, to sell a company, buy another company, or merge one business with another.
• Identify the stakeholders.
• Determine the methods and data sources most appropriate to the valuation objectives and stakeholders of the scenario.

Step 2: Gather data.

• Compile information about the target business, including business operations, management structure, facilities, and anything else that’s relevant.
• Aggregate all historical business financials and develop a financial model and projection.
• Define sensitivities and risk scenarios.

Step 3: Conduct research and analysis.

• Perform in-depth analysis of company documents, audited financial statements or tax returns, business operational information, intangible assets, macroeconomic and business-specific risk factors, and other data.
• Research macroeconomic factors, industry- and business-specific economic factors, industry trends, and risk factors specific to the business model.
• Analyze the competitive positioning and go-to-market strategy, and create a business overview of the target company.
• Analyze comparable public and private industry transactions and trading multiples.

Step 4: Define valuation targets.

• Identify and implement valuation adjustments for specific business risk factors
• Review the company’s description and market positioning as they relate to valuation.
• Perform an industry-specific review and assessment of prevailing economic conditions and trends that may affect valuation.
• Complete historical and projected financial statements in line with business valuation standards.
• Consider, underwrite, and execute industry- and scenario-specific valuation methodologies using best practices. While there are many valuation methods a candidate or business can use, the three most common are comparable company analysis, discounted cash flow analysis, and precedent transaction analysis.
• Validate all assumptions and results.
• Arrive at a customized, comprehensive, and defensible business valuation or range of valuations.

Step 5: Create investment memorandum to buy or sell a target company.

• Craft a preliminary draft. Every investment memorandum will be nuanced for its unique business, but generally, each should include an in-depth overview and analysis of the operations and competitive position of the target business, an industry overview, a financial analysis of historical and forecasted performance, a valuation overview, an overview of the management team, and a description of the proposed transaction.
• Revise the preliminary draft, as needed, per stakeholder input.
• Issue the final report with customary disclaimers, representations, and warranties.

Step 6: Conduct the M&A process.

• Sell-side – Draft a potential investor list and reach out to them to solicit offers for the business.
• Buy-side – Offer a bid for the target company.
• Participate in negotiations to agree to key deal terms.
• Prepare relevant documentation such as term sheets, nonbinding LOIs, and formal purchase or merger agreements.
• Conduct due diligence.

Step 7: Close the merger or acquisition transaction.

• Set a timeframe. Closing timelines will vary greatly, but once due diligence is completed, a small to medium business transaction can close quickly, while larger companies may face regulatory requirements to close that can take years to complete. The M&A expert may help the company develop post-merger integration plans at this stage as well.

Finally, be sure to evaluate a candidate’s interpersonal skills. A successful merger or acquisition process requires collaboration and trust between management and the M&A consultant, so it is important to develop a rapport.

Why do companies hire Mergers and Acquisitions Consultants?

When business owners want to sell their company or a business division, acquire another company or business division, or merge with another company or business unit, they’ll typically turn to an M&A advisor to manage the process.

An M&A advisor is a financial professional with experience running all aspects of this type of transaction, including conducting research, building financial models, determining company valuations, and drafting documents such as LOIs and investment memorandums, as well as soliciting offers, negotiating terms, and closing the deal. In some cases, they will advise on post-merger integration too. Firms may hire M&A experts as early as the planning stage to help with initial exploration, research, and strategy as well. Finding the M&A specialist who is the right match for your company’s transaction can help ensure that the complicated process is completed promptly, effectively, and professionally.