CFOs Tips: Get The Most From Your M&A Banker

How does a chief financial officer choose the right investment banker? Rapport, experience and foresight with a plan are obvious qualities, say CFOs who have spoken with ansarada. "If you don't get your investment bank right it will make your life hell," says one CFO. "They make or break a successful transaction." CFOs who have worked successfully with bankers say that good investment bankers do the following:

• They familiarize themselves with the company's business model, future earnings potential and strategic assets.
• They put together models so everything is in place before any transaction is initiated internally or by another party.
• They put together game plans on deals or takeover and merger proposals right down to planning the first five minutes of the deal or approach, the first hour, the first 24 hours, the first 48 hours, the first week and subsequent weeks.
• They help assess in cases of a friendly or hostile takeover approach whether the proposed transaction is a bona fide offer able to be taken to shareholders. The bankers should also be able to discern that an offer is silly and tell those who made the approach to go away. An all stock takeover offer is easier to analyse than a cash offer as a cash transaction may be dependant on an equity raising or debt financing.
• They should be able to project manage a takeover or takeover defense, together with an internal company deal team and outside advisers including law and public relations firms.
• They should give objective advice to a company board, chief executive, CFO and a corporate deal team as the deal progresses, making sure the company is not rushing headlong into a transaction and always has alternatives if the board decides the deal should not go ahead.
• They have a plan on what to do if news of a deal leaks; a script prepared that can be communicated effectively to shareholders.
• They choose and manage the virtual data rooms where merger and acquisition due diligence occurs, ensuring that there are protocols on data room documentation and reports while managing the daily Q&A process.

"Investment bankers conduct the orchestra," says one CFO. "They set the timetable in any transaction.  

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