M&A transaction advisory services usually means something narrower than M&A advisory: the diligence work, most often quality of earnings, provided by an accounting firm rather than by the bank running the process. The distinction matters because the two are separate engagements with separate fees and, deliberately, separate loyalties. This page sets out what a transaction advisory engagement delivers and why it is kept apart.
What it delivers: quality of earnings, principally
What the business actually earns after normalising one-off costs, owner remuneration and any revenue that does not recur. Every adjustment argued here moves the price by the multiple, so an item worth $100,000 on a five-times deal is worth $500,000 of price. That leverage is why it is a specialist engagement.
Plus working capital, debt-like items and tax
The completion mechanism, anything that behaves like debt without being called it, and the tax exposures that become indemnities. These decide the difference between the headline both parties shook hands on and the amount that actually moves at close.
Why it is a different firm from the banker
The adviser running the process is paid on completion; the diligence provider is paid for an opinion. Putting both in one firm creates an incentive nobody needs to argue about, and buyers and lenders are used to seeing them separated for exactly that reason.
When a seller should buy it too
Vendor diligence, commissioned before going to market, finds the adjustments the buyer would find and lets the seller decide how to present them rather than react. On a competitive process it also compresses the timetable, which is worth more than its cost when the tension is real.
Questions people ask about m&a transaction advisory services
Is transaction advisory the same as M&A advisory?
No. Transaction advisory usually means the diligence work, most often quality of earnings, from an accounting firm rather than from the banker.
Why keep the two separate?
One is paid on completion and the other for an opinion. Separating them removes an incentive nobody wants to have to argue about.
Should a seller commission vendor diligence?
On a competitive process, often. It finds what the buyer would find and lets the seller present it rather than react to it.