Specialise in: M&A deal advisory
Mergers and acquisitions (M&A) advisory firms come in all shapes and sizes, from bulge-bracket household names such as JP Morgan and Goldman Sachs working on billion-dollar deals, to middle-market advisers focusing on mid-cap transactions, and firms working on M&A in the SME markets.
Advisory firms work with clients, including start-ups and entrepreneurs, to identify potential M&A partners or assets that will complement their business goals. They evaluate the financial and operational performance of potential targets and negotiate the best possible deal terms. More specifically, M&A advisers can establish company valuations, analyse market conditions, develop buy/exit strategies, prepare marketing documents, identify potential targets and investors, work on deal structuring and negotiation, manage due diligence and coordinate closing activities.
At Singapore-based M&A consultancy Vallaris, CEO Siong Yoong FCCA specialises in marrying and divorcing businesses. ‘Vallaris was established to help businesses expand beyond Singapore into Asia Pacific through mergers and acquisitions,’ he says. ‘Entrepreneurs create wealth by buying/selling businesses, not by working in them. My responsibility is to help clients buy, accelerate and harvest business value.’
At large traditional banks and established deal advisory firms, career ladders are well defined. Many people are cherrypicked from good universities to spend several years cutting their teeth as analysts, then associates, before moving into the senior echelons of manager, director and eventually partner.
As an ACCA member considering this career path, depending on the level and type of experience you bring to the table – and deal experience or specific sector expertise from one of the large professional services firms is particularly highly valued – you may be able to move into an associate role or higher.
Smaller firms may deploy a similar structure but can also be less rigid and nimbler, serving as a more feasible entry point in a career change. But whichever route you take into advisory, it’s all about value: can you convince parties of your financial risk assessment of the target, valuation acumen, tailored book of contacts, expert negotiation and structuring to optimise a business sale outcome?
Getting in and getting on
ACCA members are already endowed with one asset for working in advisory: the language of finance. ‘I’m an entrepreneur, mergers and acquisitions adviser, and venture capitalist,’ says Siong Yoong. ‘In business, deal-making and investment management, everyone speaks the same language: finance. In school, they ask for your report card. In business, they ask for your financial statements. If you cannot speak accounting, you are already behind.’
He recommends preparing yourself in several key areas before approaching a firm or applying for a role. First, you want to be able to demonstrate the ability to execute or assist with M&A transactions – eg the start-up scene, investment, private equity and venture capitalism.
Develop your industry knowledge by researching and keeping abreast of trends and news. Network, whether that’s LinkedIn or in person, and mix in relevant circles, meeting the right people and getting your personal brand out there.
Work experience is highly valued, so consider how you’re going to gain some if you don’t have any. Seek out opportunities to gain exposure to M&A, either with your current employer or by making career moves that will edge you closer. Consider secondments, shadowing, career change and even – if it gets you closer to the industry – a less senior position.
If you took the advanced financial management paper while studying ACCA, you’ll be familiar with key M&A concepts. Accountancy is a fantastic educational background for M&A, but you could also consider further courses to bolster your skillset and experience, such as the CFA financial analyst or CAIA alternative investment analyst qualifications.
Beyond this, Siong Yoong says, the key qualities that will help you enter and succeed in M&A advisory are:
Analytical skills. ‘Enhance your financial analysis, valuation and due diligence skills. Familiarise yourself with methods used in M&A, such as assessing market potential, competitive analysis and evaluating start-up financials.’
Commercial acumen and entrepreneurial mindset. ‘Having an entrepreneurial mindset allows M&A advisers to think creatively, embrace innovation and understand the challenges faced by entrepreneurs. This mindset helps in providing strategic guidance and support to portfolio companies.’
Risk management. ‘Successful M&A advisers possess the ability to identify and mitigate risks effectively while balancing them with potential rewards. Developing a risk management framework is essential for long-term success.’
Due diligence. ‘Conducting thorough due diligence is fundamental in evaluating investment opportunities. The ability to assess the viability, market potential and competitive landscape of a business is essential for minimising risks and maximising returns.’
Communication and negotiation. ‘Effective communication and negotiation skills are necessary for building relationships, influencing stakeholders and structuring favourable investment deals. Clear and persuasive communication helps in conveying the value proposition to entrepreneurs and co-investors.’
Networking and relationships. ‘Building a robust network of connections within the entrepreneurial and investment communities is critical. Having access to a wide range of industry experts, entrepreneurs, co-investors and potential partners can provide valuable insights, deal flow and collaboration opportunities.’
Adaptability and continuous learning. ‘The M&A and venture capital landscapes are constantly evolving. Being adaptable and open to new ideas, technologies and investment models is vital. Continuous learning and staying abreast of industry trends and regulatory changes are crucial for success.’
‘I encounter brilliant entrepreneurs on a daily basis who have great ideas and track records. However, only 1% of them fundraise successfully,’ Siong Yoong says. ‘The main challenge is that the value of a business can’t be explained by numbers alone. You need a team to craft the perfect story to bring to market.’
Author: Neil Johnson, journalist
This article was first published in AB magazine August 2023