Investment Banker + Attorney = The M&A Dream Team
Why You Need Both
Rajesh U. Kothari
by Rajesh U. Kothari
Deals are complex by nature. With the variable dynamics of each unique deal, they require extensive toolboxes to navigate. The investment banker and M&A attorney each possess an essential toolkit. Combined, they provide a foundation for creative solutions.
The investment banker and the M&A attorney team are a formidable force driving a deal because every deal has two happening simultaneously – a legal deal led by the M&A attorney and a business deal led by the investment banker. The two leads must work in concert to succeed.
Investment bankers dig deep into a business during the diligence process to craft the confidential information memorandum business story. Spending countless hours learning about the business, they can arm their M&A attorney partner with insights and perspectives that enable them to effectively manage the minutiae of a deal.
Similarly, legal and regulatory elements are critical and necessary constraints to the investment banker’s creativity in crafting transactions. When the M&A attorney shares legal and tax implications early, the investment banker can better prepare to address potential issues and develop effective proposals that conform to legal requirements.
Deals are like piloting a plane. Active coordination and strong communication are imperative. Issues will arise. Identifying concerns early matters. Having experts in M&A deal structure and legal aspects help to ensure issues are identified and dealt with promptly. When in sync, the power duo of investment bankers and M&A attorneys can strongly advocate, negotiate, and create transaction dynamics to counter another team that may be larger and more in tune with business dynamics.
Experienced investment bankers and M&A attorneys also often have extensive networks they can call on to find additional experts, as needed, to keep deals moving forward. In this way, issues are resolved – better solutions are created.
Successful negotiations require connecting with the other side, understanding issues from all involved viewpoints, and developing rapport. By coordinating efforts, the investment banker and M&A attorney can tactically trade-off negotiations to improve client outcomes. This trade-off can look like a detective drama, with the investment banker being the bad cop and the attorney the good cop during one phase, then at the right time, switching roles to achieve the desired result.
Throughout the process, we can’t ignore the client’s emotions. It may be their first deal. Having both key advisors aligned provides reassurance, confidence, and stability for the client and the transaction. Working a deal is easier when the business and legal advisors can manage client expectations cohesively.
All legal issues come down to business points. All business points boil down to risk and value that must be documented. Investment bankers and M&A attorneys working harmoniously are the M&A Dream Team for success.
GCG member firmCascade PartnersCleveland (OH), Southfield (MI), USAT: +1 248 430 6266Advisory, Corporate Finance, M&A
Cascade Partners is an investment banking and private investment firm serving entrepreneurs, businesses, and investors active in the middle market. Drawing on the deep management, investment and transaction experience of its principals, Cascade Partners provides the guidance and resources necessary to navigate the complexities of managing growth as well as acquisitions, divestitures, financing, and other strategic initiatives.
Rajesh U. Kothari draws on his over thirty years of experience as an investor, financial advisor, and entrepreneur to assist companies with mergers, acquisitions, divestitures, restructurings and other corporate finance strategic initiatives. Rajesh is the founder and a Managing Director of Cascade Partners, a private investment and investment banking firm. Contact Raj.
