When it comes to M&A, the strength of consulting companies is often overlooked in favor of their higher profile counterparts in investment banking.
But if the role of consultants is to help managers overcome the most complex challenges to growth that they face, then it follows that they should have expertise in M&A – usually a complex challenge and a shortcut to growth all at once.
Many of the companies that have turned to DealRoom over the past decade have been consulting companies, and in our experience, the best consulting companies bring just as much to the table as investment banks in dealmaking.
Below, in no particular order, we have compiled what we believe to be the cream of the crop among consulting firms offering M&A services.
Choosing the right M&A consulting company
While M&A consulting companies may seem like black boxes when it comes to retrieving any information, they’re usually not slow about putting together comprehensive pitch decks on their offerings if you’ve got a good strategy or transaction proposition.
Make sure that your company approaches a few different consulting companies before deciding on which company (or companies) to hire for your M&A process.
Issues to look out for include:
- Relevant transactions in your industry
- Partner industry expertise/experience
- Scope of project as outlined in pitch
- Costs involved (including contingencies)
- If there is a strategy component in addition to the transaction itself
Although this list has been made in no particular order, PwC may well be the biggest of all consultancy houses in the M&A sphere.
Its vast client base, staff in excess of 280,000, and expertise in a range of relevant areas, mean that it has an unrivalled set of resources to call on when clients come calling for their M&A needs.
It led for advisory in the global construction industry in 2020 with Goldman Sachs, advising on nearly $4 billion of deals.
Another member of the ‘Big 4’ auditing companies, KPMG has resources comparable to those of PwC, and is present in 157 countries.
This is a scale that even blue chip investment banks cannot compete with: Goldman Sachs has offices in 30 countries; Morgan Stanley’s presence extends to 35. Thus, when a company is investigating an acquisition outside of the usual geographies, it makes sense to consider the Big 4.
In 2021, KPMG was the exclusive sell side advisor to Danske Bank, when it sold Danske Bank International to Union Bancaire Privée.
3. Bain & Company
Bain’s expertise in identifying and extracting value through transactions ultimately led to the creation of Bain Capital, one of the leading US private equity houses.
The book, ‘Mastering the Merger,’ considered one of the best on the subject of mergers and acquisitions, was written by two Bain & Company consultants. The company worked with BCG (see below) on Triton’s recent acquisition of Berman Clinics.
Considered the most prestigious of all the consulting firms, McKinsey has been the subject of endless articles, books, and even SEC investigations.
It advises governments, organizations, and corporations on whatever the burning need of the moment happens to be (Covid-19 consulting to the French and UK governments is a recent example).
The company is famously secretive on who it advises, but as an indication of its influence, in 2021 Pfizer hired a McKinsey partner to head up its M&A operations – arguably the world’s biggest in-house M&A operation.
5. Alvarez & Marsal
With its specialization in turnarounds, Alvarez and Marsal is usually the consulting firm that companies call when they’re acquiring distressed targets. Most of its clients are in the private equity space.
Sresta Natural Bioproducts hired Alvarez and Marsal to find a buyer at the end of 2020, and it’s currently under the watchful eye of private equity giants Sequoia and CDC.
6. LEK Consulting
LEK Consulting is a UK-based consulting firm, and that is generally reflected in its client base. It advises on a variety of M&A transactions (acquisitions, combinations, separations, JVs, etc.), and takes clients from target identification all the way through to the post merger integration phase.
It was one of the chief advisors on the UK’s privatization program in the early 1990s. A recent transaction it advised on was AUA Private Equity’s acquisition of Westminster Pet Food.
The Boston Consulting Group churns out so much outstanding material on M&A and how to successfully conduct it, that it would come as a large surprise if it didn’t have a mergers and acquisitions practice of its own.
Like many of the consulting firms on this list, it tends to benefit from a large alumni network at major US corporations, who call on BCG to help out on strategy assignments, often including M&A transactions.
In 2021, it advised on Triton’s acquisition of Bergman Clinics.
The historical tie-ups between consulting companies and their peers is undeniable. Kearney (previously A.T. Kearney is, along with Bain, a spinoff of McKinsey).
Kearney’s M&A and private equity advisory arm is one of the fastest growing in the industry, having made it a focus area over the past half decade. In the second half of 2021, it appointed Alberto Fumo as its European head of M&A.
To again emphasize the proximity of the companies on this list, Fumo previously worked in a similar role for both LEK Consulting and Bain.
Another of the ‘Big 4’ on this list, EY recently announced record revenues from its strategy and M&A, with its revenues in this area rising to $4.8 billion globally.
The company’s strategy arm sometimes goes by the name ‘EY Parthenon,’ and has advised on some of the world’s largest health tech deals over the past decade, an area where it is regarded as an industry expert.
The company recently advised shareholders at Valeo Foods on their buyout by private equity firm (and a spinoff of Bain and Co), Bain Capital.
10. FTI Consulting
Owing to its globally recognized speciality in compliance and dispute management, FTI Consulting usually finds itself called in for the due diligence component of M&A transactions.
Unlike those from the ‘Big 4’, FTI does not have any audit clients, meaning that its due diligence practice benefits from having no barriers or SEC-type constraints.
Along with a raft of other consulting firms, it recently advised IT professional services firm Node4 on its switch across private equity owners.
How DealRoom can help
If your choice has been to opt for a strategy consulting firm to lead your M&A process, the requirements for project management will basically be the same.
DealRoom’s M&A project management tools work equally well, whoever your intermediary.
In fact, these tools even become increasingly valuable if your intermediary is adding a strategy component to its proposition.
Talk to us today about how our project management platform can lead you to outstanding outcomes in mergers and acquisitions.