What do M&A firms do?
M&A refers to the consolidation of companies or assets. M&A can include a number of different transactions, such as mergers, acquisitions, consolidations, tender offers, purchase of assets and management acquisitions. M&A firms advise companies and their shareholders on these matters.
From a legal point of view, a merger is a legal consolidation of two entities into one entity, whereas an acquisition occurs when one entity takes ownership of another entity’s stock, equity interests or assets. From a commercial and economic point of view, both types of transactions generally result in the consolidation of assets and liabilities by means of a share transaction.
As an M&A advisor you will either be on the buy side or the sell side of the deal. On the sell side, your client wants to sell (parts of) his company, and on the buy side, your client wants to buy a company, either a particular one he’s already identified, or one they want you to find for them. In either case an M&A advisor is out to get the very best deal for his client.
Corporate strategy, private equity, valuation, venture capital, startups, you name it. Learning to prioritise, break down tasks, and stay cool under any circumstances are some of the skills you will develop in little time. People that work in an M&A for a while can make sense of complex data intuitively and rapidly, and they have extremely high quality standards.
What do professional service firms do?
In the Netherlands, the biggest professional services firms are generally referred to as ‘the Big Four’, which include Deloitte, KPMG, PwC and EY. The work done by professional services firms is quite broad and can normally be divided into three main areas: audit, tax and advisory.
All companies are legally required to conduct audits on a regular basis, usually annually. An audit is an investigation into all aspects of a company’s business to ensure that its accounts accurately reflect the real status of that business. Audit work is predominantly financial, but may also cover evaluating a company’s health and safety provisions, IT security and environmental impact.
Those working in tax at a Big Four firm advise their clients on what they need to do to comply with their tax obligations, the implications of new tax legislation and on tax mitigation strategies, that is, the ways in which they are legally permitted to structure their affairs to minimise the amount of tax they pay.
Advisory work covers a broad spectrum of areas. It could involve advising clients on improving the performance of their business, rearranging their corporate structure, or dealing with risks they face. Similar to investment banks, they also provide advice on mergers & acquisitions (M&A), corporate restructuring or financing questions. The advisory part of the Big Four firms is growing rapidly and also includes less traditional areas such as data analytics and cybersecurity.