Deal Team
An amalgamation of a group of professionals who support businesses in financial planning and executing important financial decisions.
What is a Deal Team?
A deal team is an amalgamation of a group of professionals who support businesses in financial planning and executing important financial decisions.
Complex financial transactions, such as M&A, restructuring, recapitalization, PE, and LBO, are the most important events that a company could ever go through. A single individual cannot undertake these tasks and, therefore, require professionals whose expertise and knowledge range from various fields.
As mentioned before, a deal team consists of professionals whose specialty hails from various fields, such varied expertise aids in solving complex transactions and makes the processes easier for the businesses to make the right decision.
A deal team is not a one-man game; rather, each team member’s contribution has a great impact on the work process. Therefore, to achieve successful execution in closing the deal, the professionals work in conjunction with the team members efficiently.
Efficiency is optimized when the team supports the business owners in setting the priorities and objectives, planning, organizing, and implementing the transactional processes, along with minimizing potential risks.
Key Takeaways
- A deal team comprises professionals who assist businesses in complex financial decisions like M&A, requiring diverse expertise.
- Deal teams are essential due to the complexity of financial transactions. They provide consultancy, expertise, and strategy for successful deals.
- Essential members include wealth advisors, investment bankers, accountants, attorneys, and financial analysts.
- Teams develop strategies from the early stages of opportunities, working for buyers (buy-side) or sellers (sell-side).
- Recognized global deal advisory firms include PwC, KPMG, Bain & Company, McKinsey, Slalom, LEK Consulting, BCG, Kearney, EY, and FTI Consulting.
Importance of a Deal Team
As mentioned before, an ordinary individual cannot solve the complexity of a high finance transaction such as M&A, thus requiring a professional team. This factor itself weighs its importance regarding the deal team.
Typically, a deal team offers consultancy services that help businesses navigate through the complexity of the deal. These professionals are experts in their respective fields, having valuable experience and knowledge that drive the deal's success.
Business owners typically would have to go beyond their advisory connections to find specialists in the deal domain, especially ownership transition. It is critical on the owner's side to form a good relationship with such experts to maintain trust and integrity.
The team that the business owner puts together (in-house) or consults an advisory firm (outsource) would normally consist of analysts, attorneys, and other professionals who input strategies based on their respective fields to execute a deal successfully.
Each team member has a significant role in ensuring efficient resource utilization. Therefore, the team member’s roles and responsibilities must be communicated well to ensure all the aspects of the deal are covered without any errors.
The deal team would create a deal strategy that incorporates plans to implement, which aims to achieve a successful closing of the deal from the early options of opportunities.
Note
The team would be working on either side of the coin, i.e., for the buyer or the seller. For the buyer, it’s called buy-side analysts; for the seller, they are called sell-side analysts. And their work varies due to their different purpose of serving different clients.
Key Members of a Deal Team
Till now, we have explored “why” businesses need a deals team for high finance, along with “what” qualities they possess for the role. But now, let us explore “who” in a deals team.
Typically, a deals team can vary between organizations and the task at hand, but in general, let us explore the essential members of a deals team.
1. Wealth Advisor / Consultants
Consulting the wealth advisor is the first stage to get exposure to the available options in the market based on tailor-cut clients’ current circumstances. This allows the client to understand options and take a strategic approach to achieve the desired outcome.
2. Investment Banker
For every team, there is a leader to lead. And an investment banker typically fills that leadership role for the deals team. An investment banker manages and dictates each member's role and responsibilities to ensure that the team is well aware of the work ahead and executes effectively.
For a business, an investment banker would assist in executing the transaction smoothly and efficiently by providing options and deploying strategies, preparations, planning, and management of the deal.
3. Accountants
An accountant is a professional with expertise in accounting and taxation, whose expertise is of high value, especially during the planning stage for their expert advice. These professionals are heavily involved in the overall process of the transaction.
The financial information of a deal can make or break the deal. Since accountant professionals are equipped with financial literacy, the businesses who plan to indulge get a firm insight into financials by audit and other advanced analysis of the financial statements.
4. Attorney / Legal Advisor
Attorneys are the legal professionals on the team. They specialize in the law of the country on which the subject deal is based. These professionals inspect the deal for legal compliance and advise businesses on law-focused issues.
Attorneys' financial literacy is an important factor, especially having experience with the deals, as they can also provide taxation advice. Even though accountants have taxation knowledge, an attorney has up-to-date knowledge of the law, which changes yearly.
5. Financial Analysts
Financial analysts are professionals with expertise in financial analysis and hold financial knowledge and Data analysis. These professionals are well versed in utilizing programming languages such as Python and R to fetch and process financial data.
These professionals are typically a part of the Transaction & Restructure team, which analyzes deal structure by deploying independent business reviews, financial modeling, monitoring, and restructuring engagements.
Note
Chartered Financial Analyst (CFA) is a global gold standard designation in the field of investment analysis. Professionals who are CFA charter holders are highly respected in the industry due to their rigorous training in terms of investment knowledge and analytical expertise.
6. Additional Support
The need for additional professional support arises as the deal increases in complexity. Cases like environment, real estate, tech, and alike require professionals in their respective fields to provide specialized support to assist the deal team in executing the deal successfully.
Big Names In Deal Advisory
There are big names in every type of professional job profile in every market around the world. And a deal advisory is no different. These firms have a vast team of deployable professionals ranging from various fields of expertise required for a smooth process of a complex transaction.
Companies can approach such firms requesting assistance in procuring deals at effective rates in order to execute the transition professionally and efficiently. Below are the top 10 deal advisory firms that are recognized globally due to their reputation and global presence.
- PriceWaterhouseCoopers (PwC)
- Klynveld Peat Marwick Goerdeler (KPMG)
- Bain & Company
- McKinsey
- Slalom
- LEK Consulting
- Boston Consulting Group (BCG)
- Kearney
- Ernst & Young (EY)
- FTI Consulting
Deal Team FAQs
A deal team is a group of professionals who work as a team to execute successful deals of high finance, such as Mergers and Acquisitions, Divestiture, Private Equity, and Leveraged Buyouts.
A deal strategy is a set of “How to” plans implemented to achieve a successful closing of a deal from the early stage of opportunity.
The buy-side analysts are those professionals who work for the acquirer in determining whether the opportunity is profitable. Whereas the sell-side analysts are those professionals who work for the seller in valuing the opportunity.
The team includes wealth advisors, investment bankers, accountants, attorneys, financial analysts, and support professionals.
World-renowned deal advisory firms are PwC, KPMG, McKinsey, EY, and BCG.
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