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Deal Team

A team of professionals who support the business owner in planning and executing a transaction

What is a Deal Team?

Ownership transactions such as ESOPs, M&A, and recapitalizations are usually complex transactions that require the knowledge and skills of a wide range of deal professionals. Any deal team needs to get all individual players contributing in the right measure and at the right time during the course of the deal process for it to be successful in executing and closing a transaction. The deal team’s ability to communicate and work together can dramatically influence, both negatively and positively, the outcome of a transaction.


Deal Team


An efficiently functioning deal team will support the owner of the business in determining the goals and objectives of the transaction, organizing the company, planning and implementing the transaction process, as well as forestalling and alleviating deal problems. If all said factors are properly addressed, the completion will be done faster and lead to a generally successful transaction.


Importance of a Deal Team

Business owners usually employ existing groups of advisors that offer consultation services when they encounter problems or face certain business needs. The groups usually include the attorney and accountant of the owner, as well as other personnel. Even though the counselors and advisors are useful in the daily operation of the business, additional expert knowledge is usually necessary for ownership transition transactions.

Therefore, the business owners may need to search beyond their present advisory circle in order to find specialists with ownership transition know-how. Finding advisors with broad transaction experience perfected by completing related deals is critical for the successful execution of such a transaction. The existing advisory group will often recommend professionals with applicable skills for such transactions.

In the process of putting up a specialized deal team, it is critical for the business owner to form a good relationship with all the professionals in order to develop trust and respect in the guidance they offer. Sometimes there may be a significant overlap in the experience and skill of the professionals on the deal team.

For such a reason, it is imperative that the responsibilities and roles of each individual in the deal team are defined clearly and communicated to ensure that all aspects of the transaction are covered, and the deal is completed smoothly. One member of the deal team, often the investment banker, will act as team leader to ensure good use of the resources and coordinate the whole transaction process.


Key Members of a Deal Team

An effective deal team needs to include, at a minimum, experts from the following disciplines:


1. Investment Banker

An investment banker helps the business owner in company preparation, understanding transaction options, developing transaction positioning strategy, and generally manages the execution of the deal. The investment banker leads the whole deal team and works with all relevant parties to ensure that the transaction process is smooth until closing.


2. Accountant

The accountant is often already among the advisory group of the business owner. The role of the accountant is usually to provide accounting and tax advice, which is important in the pre-transaction planning stage. Tax planning, when done early, can positively influence the transaction and help to maximize the profits after tax.

Moreover, the company’s financial information quality can significantly affect the deal outcome. Additional accounting proficiency is often required in the process of auditing or inspecting the company’s financial statements or in providing other forms of special analysis that will advance the deal process.


3. Wealth Manager or Advisor

A skillful wealth advisor is important in the preparation stage before the deal to provide the business owner with advice on investment options, as well as determine the least amount of profits after tax that is required from the deal to sustain a desired lifestyle after the transition.


4. Attorney

An attorney will often also be an existing member of the business owner’s advisory group. The role of the attorney as a member of the deal team is to ensure that the legal records of the company are in perfect order for the transaction. Attorneys will also offer legal advice, as well as advice on tax matters in the transaction.

Employing a proficient deal lawyer that is conversant with financial and M&A transactions as a member of the deal team is important. In cases where the existing attorney lacks applicable experience, supplementary legal professionals can be sourced from another firm.


Other Members of the Advisory Team

Depending on circumstances of the deal, other advisory team members can be included in the deal team. For instance, consultants may be needed to provide advice for specific deal issues such as financing matters, real estate matters, and environmental situations.


Key Takeaways

For an ownership transaction to be completed successfully, an experienced deal team with varied skills and a cooperative work ethic is important. The advisory team members may include, but not limited, to an investment banker, an accountant, an attorney, and a wealth manager. It is essential that the owner of the business is comfortable with all the deal team members and that the individual roles and responsibilities of the team members are communicated clearly and understood.

The expertise of the deal team will largely influence the preparation, execution, and success of the transaction. For such a reason, a business owner needs to build a strong deal team before starting an ownership transition transaction.


Additional Resources

CFI is the official provider of the global Financial Modeling & Valuation Analyst (FMVA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful:

  • Deal Structure
  • M&A Considerations and Implications
  • Team Cohesion
  • Types of Mergers

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