M&A Specialist

M&A Specialist

CFOs are more than just number-crunching accountants. The role of CFO has undergone significant changes in recent years, moving outside the financial department to take on a greater strategic significance.

M&A specialists CFOs are being called in to oversee their company’s mergers and acquisitions, requiring them to utilise a unique set of soft skills, stakeholder relations, and financial expertise to deliver as much value as possible.

Overseeing a merger and acquisition is a landmark achievement for any CFO but they’re a focal point for M&A specialists. These senior financial professionals can be recruited on a part-time or interim basis to outsource the responsibility of planning and implementing a merger and acquisition, freeing up your CEO to focus on everyday responsibilities.

FD Capital is the UK’s leading financial recruitment agency, connecting start-ups, SMEs, and scaling organisations with M&A specialists across the country. Start your search for a specialist M&A CFO by contacting our team at recruitment@fdcapital.co.uk or 020 3287 9501.

What is a Merger and Acquisitions Specialist?

An M&A specialist is a senior CFO with a proven track record of overseeing and implementing mergers and acquisitions. They may be hired on a full-time basis and carry a full CFO workload or can be recruited on a part-time or interim basis to focus on a specific merger or acquisition.

This flexibility is ideal for start-ups and SMEs who don’t have the budget to recruit a full external team to oversee an M&A or to hire a full-time CFO.

The CFO is a link between both companies engaged in the M&A, acting as the eyes and ears for both the board and CEO. Their financial skills enable them to identify potential M&A opportunities and incorporate risk management into their strategy to get the most value out of their deal.

The Role of a Financial Team in M&As

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Every financial team will look different from one company to the next. The role they play within an M&A will depend on the company’s approach and whether this is the organisation’s first M&A.

Most companies evolve their approach to mergers and acquisitions organically, especially those who rely on an M&A specialist instead of having a dedicated team that works solely on M&A.

The CFO is responsible for considering any potential acquisitions, crunching the numbers involved, and ensuring due diligence. They’ll be responsible for determining the value of a potential M&A and presenting it to the company’s board and leadership team to determine whether to make the purchase.

An M&A specialist is responsible for gathering the data – including both positive and negative factors – to present an objective look at the other organisation and the potential value the acquisition could bring.

CFOs will spend most of their time getting to grips with the numbers involved, long before presenting the M&A proposal to the board. This exercise also requires them to have real-time insight into their own company’s performance, value, and finances to paint a wider picture.

An M&A specialist will take the critical steps of ensuring that the numbers presented to them are correct. CFOs who don’t specialise in M&As will still have the skill set required to oversee the process but may lack the efficiency and unique insight of an M&A specialist.

Companies that are exploring the option of a merger or being acquired by another company may also decide to recruit an M&A specialist to prepare their accounting. The organisation will want to ensure they present the correct numbers to get the correct valuation and prevent any delays further in the process if incorrect numbers pop up.

Getting on top of the data early can enable CFOs to plan accordingly. Most will want to provide extra time within their strategy for any potential hiccups along the way. Spending more time on the data early on can speed up the process while still ensuring due diligence is met.

A CFO will continue to be responsible for the company’s overall finances throughout the merger and acquisition. CFOs on both sides of the equation may find themselves needing to recruit additional financial professionals to carry the workload.  Having a background and track record of successful PE house and VC fundraising is a great benefit, and many of the FD Capital team have just that experience and so can assist with a VC or PE fund raising exercise.

An M&A that occurs across jurisdictions may require a specialist CFO with experience dealing with international legal systems and taxes.

The role of a Specialist CFO in Merger and Acquisitions

Any CFO will take centre stage within their company during a merger and acquisition. It’s their responsibility to present the potential M&A to stakeholders and to determine the valuation of the deal.

They’ll be responsible for overseeing almost every aspect of the deal and developing a post-acquisition strategy to ensure synergy between the two organisations as they become one.

A company may decide to recruit an M&A specialist before exploring a potential merger and acquisition opportunity or to ensure its company is financially sound before seeking a potential buyer. Understanding the responsibility of a CFO during the process showcases the value an M&A specialist CFO can bring.

1. Is the Deal Worth Exploring?

The first responsibility of an M&A specialist is to determine whether the merger and acquisition are worth investing time in exploring. The CFO of a financially stable organisation keen on expanding will be on the lookout for competitors to purchase to grow their market share. The CFO will have to crunch the numbers to determine the potential value of the M&A and decide where the purchase could fit into the company’s long-term goals.

An M&A specialist will also need to determine whether the two companies could be merged in a way that leads to synergy within the new, expanded organisation. This aspect is often overlooked until problems start to occur within the transition period between the two organisations.

Risk management is the first responsibility of a CFO. Exploring a merger and acquisition is a time-consuming process, meaning a CFO will want to avoid spending time and resources on a potential purchase that isn’t followed through on.

The M&A specialist will present the numbers and their objective opinion on the valuation of the merger and acquisition to allow the board and stakeholders to vote.

2. Ensuring the Vetting Process

An M&A specialist will quickly establish the necessary vetting process once they’re given the green light on exploring a potential purchase. The financial department will need to vet the other company, including determining a valuation for the acquisition and setting a pricing expectation.

The CFO must decide on criteria that ensure the vetting process is resilient. M&A criteria should include positive and negative criteria to ensure an accurate valuation of the company at an early stage. The company’s hidden value is necessary to examine, along with identifying potential risk factors and opportunities to improve profitability.

3. Transition Planning

Specialist M&A CFOs recognise the importance of planning for the transition period early on. Once negotiations begin, the CFO will need to start considering transition planning and presenting a proposal for stakeholders to vote on. This strategy will need to be approved before the acquisition is finalised to ensure a smooth and timely transition.

After starting the acquisition, the CFO will move their attention to overseeing transition planning. They’ll want to implement due diligence and present a transition plan that the board can agree on. This proposed plan will be agreed upon before the acquisition is finalised.

Recruiting an M&A specialist will ensure the company has a transition plan in place that includes scenario planning and forecasting powered by real-time data. Hiring a specialist is a worthwhile investment for companies making their first acquisition.

4. Finalising the M&A Deal

The company’s CEO is a lead mediator throughout the M&A negotiations, often acting as the link between the CEO and other organisation. An M&A specialist will work to get the most value from the transition as possible, including wrapping up the deal in the most effective manner.

The CFO will prepare all relevant documentation for the acquisition, including tax returns and employee data. This process is one reason why a company being acquired during the M&A transaction may also choose to hire an interim CFO to prepare its financial records.

An M&A specialist will engage with both sides of the transaction and ensure that everyone is meeting the deadlines within the agreed-upon due diligence schedule. It’s the goal of a CFO to close the acquisition as effectively as possible while ensuring risk management.

Overseeing an acquisition is a time-consuming process, especially for CFOs who already have a large workload. Having a strategy and plan in place is vital to prevent brain drain and for maintaining confidence in the transaction. Recruiting an M&A specialist ensures that your organisation has a skilled professional leading the way throughout every step of the process.

5. Planning for Post-Acquisition

Mergers and acquisitions can fail to deliver on their valuation in the post-acquisition stage when there isn’t a strategy in place. Failing to identify and mitigate the cultural differences between the organisations early on can lead to an array of problems.

Integration is one of the trickiest challenges an M&A specialist will deal with during the acquisition. The CFO will be required to make a series of tough decisions when bringing two separate companies under the same roof. The logistics of an acquisition can be a sticking point and require the CFO to work with their colleagues across every department to understand the mechanics of the business operations.

Having a clear timeline and deadline in place is vital to ensuring a smooth transition and migration of systems. The post-acquisition period will usually last for a year after the agreement is finalised, providing time for personnel, systems, and assets to be merged.

Challenges facing M&A Specialist CFOs

Overseeing a merger and acquisition is time and labour-intensive. The confidentiality of the deal often means that only a small number of people within the financial department are working on the deal. Recruiting an M&A specialist can ensure that you have an experience CFO at the helm to stay on top of the workload and tight schedule.

CFOs and finance departments without experience in mergers and acquisitions can find it a steep hill to climb. While it’s a rewarding process, putting the right strategy and timeline in place early on can prevent brain drain and poor decision-making.

Due diligence is a challenge that companies on both sides of the acquisition process face. It’s a critical but challenging aspect of the process that requires both companies to go through their financial reporting, often going back several years. However, an M&A specialist will know the risk of getting too caught up in due diligence and not asking the right questions during the acquisition.

Another challenge CFOs face during M&A is knowing when to get support from other departments. It’s rare for organisations to have a dedicated M&A team with the skills to handle every aspect of the process. An acquisition is a complicated legal process that can bring with it significant regulatory and taxation implications.

An M&A specialist will work with external advisors and other internal departments to curate a team with the skills and experience to deliver the acquisition and ensure due diligence. The CFO may look within their own network and engage professionals they’ve worked with on previous acquisitions or work with a team recommended by the board or the company’s investors.

Recruiting a Specialist M&A CFO

Recruiting a specialist M&A CFO will prepare your company for potential acquisition and ensure you get maximum value from the process. While today’s CFOs come from a diverse range of backgrounds, including non-traditional portfolios that extend beyond accountancy, a specialist M&A CFO has a unique skill set.

They have a diverse range of soft skills with operational business experience that ensures the two companies can merge and create synergy post-acquisition.

FD Capital connects companies throughout the UK with M&A specialists with industry-specific experience. Our talent pool includes specialist M&A CFOs available to work on a part-time, interim, and remote basis for added flexibility.

Start your journey to recruit a merger and acquisition CFO specialist with FD Capital by contacting our team at recruitment@fdcapital.co.uk or 020 3287 9501.

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