Mergers and Acquisitions (or M&A) is an umbrella term used to describe a variety of financial transactions relating to the consolidation of companies and/or assets. The goal of a merger or an acquisition is typically to expand, minimize costs, or create a better capital structure.
Mergers and Acquisitions are complex processes that involve a number of key individuals. There are, of course, the individuals within the involved companies, typically senior-level management, but there are also three types of outside individuals or companies that may be involved – consultants, buyout firms, or SPACs.
- M&A Consultants
Most companies hire consultants from investment banks to act in the capacity of an intermediary to the deal. These consultants may work as either buy-side or sell-side advisors. Consultants also may help the companies receive financing for the deal. This is the most common M&A position.
- Role at a Buyout Firm
Buyout firms raise capital in order to allow a public company to become private. Buyout firms typically raise this capital from institutions or high net worth individuals.
- Role at a Special Purpose Acquisition Company (SPAC)
SPACS are publicly traded companies that raise funds from the general investing public, (as opposed to institutions or high net worth individuals such as with buyout firms). The funds are raised through an Initial Public Offering (IPO) in order to acquire an existing company. The money raised from the IPO will be put in a trust until the SPAC decides which M&A opportunity to pursue.
Due to an increased desire for consolidation, there is expected growth in the M&A field. Though the expected growth means more potential jobs, these positions will still be highly competitive due to their lucrative nature. M&A roles often involve extensive travel, long hours, and high stress, but offer lucrative compensation. The average salary for an M&A consultant is about $95,000. Depending on how successful buyouts firms and SPACs are and the role within the company, the compensation may exceed that of an M&A consultant.
Getting a Job in M&A
Due to a large number of elements in play during a consolidation, an understanding of many topics is required. A background in accounting, finance, law, business, and/or strategy is important. There is no specific requirement for education above a bachelor’s, but having an MBA, law degree, CFA, or CPA is advantageous. A successful M&A career requires a solid understanding of the detailed complexities of consolidating companies, but it also requires an ability to maintain the perspective of the big picture. An ability to communicate effectively with senior management and meet both their spoken and unspoken expectations is important. These interpersonal and negotiating skills are key to a successful M&A career.
Is an M&A Career Right for You?
An M&A career is often high-stress and requires both extensive financial and business knowledge as well as strong soft skills such as negotiation and communication. Though not an easy career path, it does provide a lucrative payout to those who are willing to put in the time and effort.
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