Niche Mergers and Acquisitions Call for Specialized Financial Advice
Firms struggling to mark out their own specialized niches may attempt to use mergers and acquisitions to expand and establish a clear niche branding. Globalization and the world of international business have led to increased competition, which in turn has increase the need for firms to designate their own unique market position, and prompted firms to seek to capture niches where competition is less fierce. Making the right choice about when and how to carry out a merger or acquisition in these specific circumstances has thus become the bread and butter of many firms focused on generating short term growth while protecting their long term viability and the interests of its shareholders
In this environment, M&A advisors who know the specific ins and outs of the relevant niche are essential to a timely and successfully executed decision. This kind of knowledge can only come from years of experience in the appropriate industry and must be combined with an effectively managed team that can leverage all the different assets that the team members posses so that the team can assess and impact the various relevant niches for any given industry. Thus, such a team should consist of industry specialized expertise, expert financial analysts, and members who have been on all sides of an M&A deal.
The advising firm that is already familiar with the specifics of the niche industry in question should be able to assess potential niche M&A deals, whether from the seller-side or buyer-side, in terms of a joint ventures, working on corporate carve-outs, or from the perspective of the public or private sector. These deals are often time-sensitive and can even come as a surprise, which is why a firm with accurate foreknowledge is so crucial. Firms in these circumstances can’t afford to waste any time getting financial advisors up to speed about the industry specifics necessary to offer the right advice for specialized niche mergers and acquisitions. With a private M&A advisory firm that is already acquainted with the industry, a business looking to expand can be sure to capitalize on the presented opportunity, gaining the largest benefit possible with a minimum of risk.
This is something that a generalist M&A advisor, the kind that often come along with general financial and legal counsel offered by a full-service investment bank, cannot provide for a firm interested in mergers and acquisitions in specialized niches. Generalists obviously tend to have the weight of experience in multiple deals across multiple industries, but when you need exact expertise and timely advice, their ignorance – no fault of their own – won’t cut it. So as industries continue to integrate across borders, competition for traditional markets will increase while new niche businesses will also arise as the nature of transnational business creates new opportunities and forces the specialization of established firms. In this setting mergers and acquisitions in specialized niches will rely increasingly on M&A firms with specialized knowledge that fits.
John Brown is a retired financial advisor specializing in M&A deals. If you would like to learn more about merger & acquisitions in specialized niches visit Valence Group.
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