Transactional or strategic advisor? Piotr Łagowski

A Polish entrepreneur wishing to sell his company or buy another company has a number of opportunities to obtain professional consulting services. There are many consulting companies on the Polish market with diverse business profiles. The problem with the choice lies not so much in the lack of potential advisors, but rather in their diverse nature and different qualifications. How should you choose a consulting services provider suitable for your company? Should it be a company that only engages in transaction advisory services or do you need someone who also provides broader strategic advice? In this article I would like to elaborate on this topic.

Experienced enterprises and corporations

Since you need to follow the best example, you should have a look at how advisors benefit from experienced investors and large corporations.
Due to the fact that mergers and acquisitions are not something new to them, large and experienced companies have developed methods for managing such projects. When conducting a business assessment of a planned project, they usually base it on project teams created with the participation of their employees. Corporations sometimes employ their own specialists to evaluate and manage merger and acquisition projects (these are most often persons acting as development or strategy directors).
Of course, large companies also use advisors, but usually they need them only to perform specific specialised tasks. These advisors are entrusted with such works as the effective performance of the due diligence process or negotiation process. In response to the needs reported by large corporations, companies providing transaction advisory services have appeared on the market. The role of such an advisor is usually not advising on strategic and business aspects of the planned projects, but their efficient implementation from the technical side. There are many such companies on the Polish market ranging from large international networking companies to small specialised investment boutiques and companies providing services related to the stock market.

Enterprises without experience in M&A projects

In the case of companies that have no experience in merger and acquisition projects, choosing the right advisor is a much more difficult issue.
On the one hand, non-corporations also need an advisor who will help them efficiently carry out the whole process from a purely transactional perspective. On the other hand, support in answering strategic and business questions related to the project being implemented should be an equally important (and perhaps even the most important) task of such an expert. What do we want to achieve by acquiring the given company? What will the impact be of such an acquisition on our own organisation? How do we integrate the acquired organisation in order to take full advantage of the synergy effects? These are the most important questions that need to be answered in the context of considering the economic sense of a merger or acquisition project.
Of course, no advisor will answer these questions alone. We need to involve our employees with the best knowledge of our business in the project. The key to success is the choice of a strategic advisor who will help us in the appropriate management of both the transaction and business parts of the acquisition project.

Transactional or strategic advisor – Summary

Transaction advisory is a highly specialised service that aims at the efficient completion of an M&A project. Experienced companies and corporations know how to use this type of services optimally. In the case of companies that have no experience in mergers and acquisitions, it is worth considering asking for an advisor who also has business experience and is able to properly manage the whole project – both from the purely transactional and strategic side.

You can find more about the role of an adviser in our articles about the company’s purchase process and how to sell your own company.