Transaction Advisory Services

A Transaction Advisory Services deal with the transaction side of the business and are mostly third party services provided by professional services firm or an investment bank in case of a transaction. One of the most common examples of a business transaction would be the merger or acquisition of a company. In the business world, it plays a vital role to manage and execute high-profile transactions and helps you make better and more-informed decisions about how to manage your capital and transactions strategically and TAS can be called as department which looks after Mergers and Acquisitions. There are different stages to mergers and acquisitions and there are many sub-departments for the same, such as: transactional services; valuations, CFS and operational transactional services.

Company Providing Transaction Advisory Services

Services of any firm dealing in transaction advisory services will include the following services:

• Advisory for mergers and acquisitions: An acquisition is an action where one company buys another company, also called as target company whereas merger is when two or more companies combine into one company.
• Diligence services: Due diligence is an investigation of a business or person before signing a contract, which helps to ensure that all the financial statements are correct and thus reduces the chance of risk of frauds. In the investment world, due diligence is performed by companies seeking to make acquisitions by fund managers, broker-dealers and by the investors.
• Valuation services: It is a process used to estimate the economic values of an owner’s interest in a business and is used by the financial market participants to determine the price they are willing to pay or receive to affect a sale of a business.
• Debt restructuring services: Debt restructuring is a final stage before the final transaction and involves analysis of debts of two merging companies, mostly to ensure that the debts are evenly distributed and because of this very feature, debt restructuring services not only applies to merger and acquisitions but also to the banks in which they are advised ways to recover their lent money.

Best Transaction Advisory Services Provider in the UK

In the United Kingdom, firms like Ernst and Young (EY) and Bacchus Capital Advisers are the known ones who have got the expertise in providing transaction advisory services and play a vital role as part of a team of specialists and work with people from different and varied disciplines to help clients manage and execute high-profile transactions. As a part of transaction advisory services, these firms provide below mentioned services in order to help their clients in getting more for their capital:

1. Corporate finance strategy
2. Mergers and Acquisitions
3. Operational transaction services
4. Transactional support
5. Valuation and business modeling

Big 4 companies such as EY, through offering Transaction Advisory Services are helping their clients to grow and achieve their business objectives by:

• Arranging for capital, suitable and required for their growth.
• By integrating multiple businesses for the benefit of the client.
• Selection of the right partners for deriving benefit of mergers and acquisitions.

And by utilizing transaction advisory services of companies such as EY, the companies in UK are expanding nationally and globally which is creating a ripple effect and is thus enabling:

1. Generation of more employment for the youth.
2. A good and flourishing company causes the industry to flourish, which has a positive impact on the economy.

Why are Transaction Advisory Services important to businesses?

On the buy side, transaction advisory services makes sure that what you think you are buying is actually there and makes sure that you don’t end up over or under pay for the same. It also helps you to get the right structure for the deal; whereas on the sell side, with the help of transaction advisory services you make sure that your company is in good shape in order to attract a handsome profit because as a seller, you would like to maximize its value and it depends on how you position your company prior to a sale. Also by availing transaction advisory services, there are lot of things which a business can do in terms of pre-transaction planning, evaluation of opportunities and transaction execution and even post-transaction planning in order to maximize the value.

Also Read: Private Bank Transactions

Although B4 companies like EY in the United Kingdom have earned their reputation after years of knowledge and by gaining an unbeatable expertise in the field of transaction advisory services, as a company, you must always look for a firm having people with strong capabilities and experience of many transactions and not few odd ones here and there. It is important to hire the technical advisory services of a firm that has people with diverse technical skills, including tax structuring, due diligence, valuations, state and local tax, technology, business consulting, corporate finance and restructuring and succession planning because there are not one, but many benefits of using a firm for transaction advisory services and that’s the reason why today more and more companies in the UK are opting and hiring transaction advisory services because there are many complex nuances and coherent risks in deals, which one cannot overlook or ignore.

Having a good transaction advisory team by your side helps in mitigating the risks to a large extent. Also going through a transaction can be quite distracting and stressful on a business, especially the owners and thus every time you deal or go through a sizeable transaction, you want the smartest and most skilled transaction advisory team, which apart from giving you the best advice on the ongoing transaction, can also alleviate lot of distraction and stress and gives you peace of mind. Services of Big4 companies, such as EY involve helping its client to understand about business transaction and the possible risks involved with it because EY believes that the company should have knowledge of how to go through a transaction such as:

1. Whom to consider as a buyer?
2. How to find the potential buyers of the business and who would be interested in buying the business – a strategic buyer or a financial buyer?
3. Will it be in the interest of company to use an investment banker?
4. Undertaking any transaction such as fundraising, refinancing, acquiring or selling of a business or assets is an important step and those involved such as businesses, lenders and stakeholders need to understand its impact.

When you are selling, it is not like you woke up one fine day and decided to sell off your business(s) and even if that’s the case, transaction advisors help you to structure your deal so that you earn from your capital. If you are selling your business, they help you to prepare for it at least a year in advance by making you do the practices such as: Cleaning up your company and finances by having a review or audit done, in case you haven’t got it done recently. Also they make you understand if your tax structure is beneficial or advantageous for the sale.

Apart from this, an experienced transaction advisor will make you do due diligence on your company by checking on the things a potential buyer might look at. Transaction advisory services also assists in finding out a marketplace and to build relationship with the potential buyers because it does not happen too often that your business will get a call from a potential buyer and end up having desired transaction without considering all factors such as who are the best partners to buy the business, mainly because one may never realize that it could have gotten a much better price and sold to a better partner. Also, when you are selling your business, you are in essence taking on a new partner altogether so it becomes all the more important to know and understand whom you take on a new partner. It not only gives you the satisfaction that your business is in a safe hand but it also helps you to know that how the new person is going to treat your staff and employee i.e. the people you have been working with for years and in most of the cases, if at all the new partner is going to keep or retain previous employees or lay them off.

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As an owner of a business, it may or may not occur to you to look into factors like this and that’s where firms like EY pitch in. Team of transaction advisory services understand that you want to sell when you are most profitable so they give you the best of the services to maximize your profitability by structuring your deal just at the right time.Apart from EY, there are many such firms in the United Kingdom who are amongst the most preferred ones, when it comes to transaction advisory services, such as Grantthornton, Deloitte UK etc, who are having a team of nearly 200 advisers and have expertise in transaction advisory services such as financial due diligence, tax services, commercial due diligence, SPA advisory, vendor due diligence and financial modeling.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.