Mergers & Acquisitions - Part 2: Choosing a Banker

5 Areas you need to cover when choosing a Banker for your Merger & Acquisition process.

Choosing a banker is a key part of M&A’s, but before you hire someone, you need to outline clearly what it is you want to get out of the deal. When you approach investment banks with the intent of them pitching to become your M&A advisor, it's essential you get them to sign a non-disclosure agreement. 

So, what experience should your banker have? 

  • They should have previous experience dealing with M&A’s of your size and scope.
  • It’s also essential that they have experience in your business sector - this will mean they can come back to you with suitable bidders as well as any likely questions they might have. 
  • Their plan for you, above anything, must make you feel comfortable and confident, that they know what they’re doing, and that they have your best interests in mind. 

Trust

  • If your bankers are scared of any questions you have, then they might not be the right fit for you. On the contrary, really, they should embrace your questions and fears you might have, providing you with sound and insightful advice to best explore all of your options. 
  • They should also set out clearly, who your point of contact will be when dealing with the M&A on their deal team. 
  • Transparency is key, the senior members of bankers often spend the most time pitching for new business for their bank. This means you need to find out how much contact you’ll have with the senior member, whilst your main point of contact is likely to be a mid-level banker. 

Types of M&A Banking Members

  • Senior Banker - often a managing director or partner of the bank, they will be giving the most influential advice through your process, managing a team of junior members.
  • Associate - Typically young, mid-level banker who will be your main point of contact managing your deal who will report directly to the Senior Banker. 

Your M&A Banker will be crucial in (following bullet points are copied from the PDF) 

  • Identifying potential buyers of your company
  • Advising on what are the key value drivers of potential buyers
  • Advising on the valuation of your business
  • Developing an overall M&A project plan including a detailed timetable of the transaction
  • Advising on and assisting with key marketing messages to potential bidders
  • Communicating the M&A process and timetable with bidders
  • Facilitating and administrating the Q&A process with bidders
  • Coordinating and facilitating site visits and management presentations
  • Facilitating negotiations and potentially acting as a company representative during negotiations, especially during the terms of the deal.

3 Main Objectives of the M&A bankers’ advisory role

  • Senior advice based on the judgment of a senior banker
  • Project management of the M&A process usually done by the mid-level banker who has had some experience
  • The grunt work, collating and formatting data and documents to make them deal ready. This work is done by junior bankers.
Tom O'Brien
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