The top consulting firms for M&A, due diligence and transaction support

20 August 2018 6 min. read

A new competition analysis has identified the globe’s top consulting firms for M&A consultancy. The list spans all management consulting services from M&A strategy through due diligence, valuation, transaction execution and finally implementation, including initial post-integration work.

M&A activity globally is at a periodical high. According to data from Mergermarket, global M&A activity has reached its highest post-crisis value with $1.94 trillion across 8,560 deals recorded in the first six months of the year. The heightened demand follows from a booming deal market in the digital and software segments, low interest rates that are making deals a lucrative strategic option for cash loaded companies and a growing desire to leverage mergers/acquisitions to regain market share from newer, disruptive firms. Meanwhile, dry powder in the private equity sector – cash available for deals but for which no suitable targets have been identified – has hit $1.7 trillion, found an analysis by Bain & Company released earlier this year.

Consulting firms play an integral role in deals that come to a successful close, partnering with lawyers, tax advisors, accountants and bankers to provide the services which are needed to take a deal from inception to closure. Services consultancies play a role in include corporate strategy (how M&A activity aligns with the firm’s overall strategy), M&A strategy (which M&A approach will be most valuable) and target search & selection (mostly performed by specialised M&A consultancies and corporate finance firms). After the identification of targets, consulting firms are then tapped to support the due diligence phase where targets are investigated across a range of dimensions, including commercials, financials, the quality of leadership, human resources, the state of technology and legal.

The top consulting firms for M&A, due diligence and transaction support

In the valuation phase, consulting firms apply rigorous models and financial brainpower to assess the value of a target, which is in turn, is used as input for the negotiation phase. In parallel, post-deal strategies and integration roadmaps are prepared across the entire primary and secondary value chain of businesses, with much of that work performed by specialised deal teams, including consultants. Finally, once the deal has been sealed and the process flows into the implementation phase, management consultants support post-integration work.

For buyers of consultancy services, finding the right consulting firm for the job can be a major challenge. There are hundreds of qualified consultancies that boast a track record in the M&A landscape, from the large global players to highly specialised industry players or M&A boutiques. One way to judge firms is to look at their track record, with several large analyst firms, including Mergermarket and Thomson Reuters, keeping track of deal value and volumes supported by every consultancy.

The top M&A consulting firms

Another approach that can be taken is to look at the service quality of consultancies, and this is exactly what ALM has done in its latest ‘Transactions - Acquisitions Consulting’ study. The researchers rated consulting providers' depth and breadth of capabilities, and assessed their relative ability to create impact for their clients. Out of the analysis comes that six consulting firms can call themselves leaders in the landscape: The Big Four (Deloitte, EY, KPMG and PwC), Alvarez & Marsal and Bain & Company. All of the Big Four accounting and consulting giants are lauded for their “robust end-to-end capabilities” in the advisory, execution and integration deal phases.

Of the four, PwC and Deloitte lead the way by a margin, in particular thanks to a deeper human capital element in their offering, better capabilities in advanced analytics and data science for M&A, and a relatively better investment banking and financial capital raising advisory services portfolio.

Bain & Company is the only member of the MBB to be qualified as leader, with Bain described as operating in league of its own in the private equity, where it has a decade long heritage serving many of the globe’s top private equity firms. Its annual private equity report helps to this end; the study is regarded as one of the landmark pieces of thought leadership in the private equity industry.

Alvarez & Marsal is the smallest of the six leaders, with around 3,000 employees, compared to Bain’s 8,000. A&M scores particularly well in transactions support, and ability to guide top management through complex deals.

Then comes a group of nine. Bain’s MBB competitors The Boston Consulting Group, with 14,000 staff, and McKinsey & Company, which hosts 27,000 global staff, are next on the list. Alongside the two firms are FTI Consulting, which booked double-digit growth in the opening quarter of 2018, and L.E.K. Consulting, which recently attracted capital from Lloyds to fund expansion plans.

Next on the list, with a headcount of 1,000 globally, North Highland is a worldwide, employee-owned management consulting firm established in 1992. The firm is joined by West Monroe Partners, a multinational management and technology consulting firm headquartered in Chicago, United States, with a staff count of around 850. Also in the ranking is newly rebranded Crowe, which includes a network of some 220 member firms. Finally, independent, advisory-focused, global investment bank Houlihan Lokey and nimble, mid-sized advisory firm Stax round off the top of the list.

Other firms that earned a position of the list of top consultancies for M&A, corporate finance and transaction support include A.T. Kearney, AlixPartners, Baker Tilly, Grant Thornton, Oliver Wyman, Protiviti, RSM and Roland Berger.

Related: The top 10 global consulting firms by industry and service expertise.