Mergers and acquisitions (M&A) have faced significant headwinds over the past two years. Rising interest rates, geopolitical uncertainty, and increased regulatory scrutiny led to a 25% drop in global deal volumes in H1 2024 compared to H1 2023. However, M&A activity showed signs of recovery in the rest of the year, driven by falling interest rates and delayed transactions.
With the rising transaction complexity, M&A consultants have become important for deal execution. Companies must navigate rigorous due diligence, valuation uncertainties, and post-merger integration challenges. As firms seek strategic acquisitions and portfolio restructuring, external expertise is playing a crucial role in ensuring successful outcomes.
M&A Trends
In 2024, M&A activity shifted toward high-value deals, with overall transaction values rising 5% despite a decline in deal volume. Megadeals in technology, energy, and private equity led the recovery, driven by falling interest rates, improved macroeconomic stability, and pent-up demand from delayed transactions. However, regulatory scrutiny, due diligence challenges, and integration costs have made deal execution more complex, increasing reliance on M&A consultants to navigate these hurdles.
Regulatory Complexity
Governments and competition authorities have tightened their oversight, leading to longer approval processes and stricter compliance requirements. The Federal Trade Commission (FTC) in the U.S. has intensified its focus on antitrust enforcement, particularly affecting private equity roll-ups. In Europe and other major markets, national security reviews and foreign investment regulations have delayed or blocked deals.
Due Diligence and Risk Management
With rising financial and operational risks, due diligence has become a critical factor in deal success. A Deloitte survey found that 47% of corporate leaders consider financial due diligence the most important aspect of M&A transactions. Undisclosed liabilities, inaccurate valuations, and operational inefficiencies frequently lead to abandoned deals.
Post-Merger Integration Costs
M&A transactions often fail to deliver expected synergies due to poor post-merger integration. 59% of companies spend over 6% of deal value on integration efforts, highlighting the increasing complexity of merging operations, systems, and cultures.
The Outlook for 2025
As interest rates decline and capital availability increases, M&A momentum is expected to continue in 2025. However, cross-border complexities, regulatory barriers, and integration risks will remain key challenges. As the momentum persists, deal volumes in 2025 are projected to grow by 15% in 2025.
Companies that leverage M&A consultants for compliance, financial risk assessment, and post-merger execution will be in a stronger position to navigate uncertainties and maximize transaction value in an increasingly competitive market.
M&A Consultants Expertise
M&A consultants specialize in various aspects of deal execution, ensuring efficiency and risk mitigation.
Due Diligence Consultants
Due Diligence Consultants evaluate financial, operational, and legal risks in M&A transactions, particularly in cross-border deals and distressed asset acquisitions, where financial transparency may be uncertain. Their expertise ensures that buyers identify hidden liabilities and potential red flags before closing a deal.
Qualified professionals in this field often hold certifications such as Certified Fraud Examiner (CFE) or Chartered Accountant (CA) and are skilled in forensic accounting tools like IDEA and ACL Analytics. Some specialists also bring industry-specific experience, particularly in technology-driven sectors like automotive engineering and software development, where advanced compliance and risk assessments are required.
Valuation Experts
Valuation Experts determine the fair market value of businesses, assets, and equity, ensuring that companies enter negotiations with accurate pricing. Their role is crucial when assessing intangible assets and forecasting future growth, particularly in industries with high volatility such as Technology or Pharmaceutical industries.
They apply financial models such as Discounted Cash Flow (DCF) Analysis, Comparable Company Analysis (CCA), and Real Options Valuation. Experts in this field typically hold credentials like Chartered Financial Analyst (CFA) or Accredited Senior Appraiser (ASA) and are proficient in financial analysis platforms like FactSet and Capital IQ.
Carve-Out Consultants
Carve-Out Consultants manage the separation of business units, ensuring a smooth transition while preserving value. They are critical in divestitures and spin-offs, particularly when a subsidiary must operate independently soon after the transaction.
These consultants specialize in financial segmentation, ERP system transitions (SAP), and structuring Transition Service Agreements (TSAs) to prevent operational disruptions. Their experience in complex financial separations and IT transformations ensures that companies maintain business continuity during restructuring.
Negotiation and Deal Structuring Experts
Negotiation and Deal Structuring Experts play a key role in securing favorable terms in M&A transactions, particularly in high-stakes, cross-border, or competitive bid scenarios. They ensure that deals are structured efficiently to maximize value for all parties involved.
These experts generally use negotiation techniques like BATNA (Best Alternative to a Negotiated Agreement) and Integrative Negotiation Strategies while leveraging financial modeling to support strategic decision-making. Their background in commercial due diligence, private equity, and venture capital dynamics makes them essential in complex deal environments.
Post-Merger Integration (PMI) Consultants
PMI Consultants oversee the alignment of operations, technology, and workforce integration following an acquisition. Their work is crucial in large-scale mergers, where effective integration directly impacts the success of the transaction.
With expertise in project management and operational efficiency, PMI specialists often hold certifications such as PMP or Six Sigma Black Belt. They leverage platforms like SAP ERP for systems integration, Workday for human capital management, and Power BI for synergy tracking. Their ability to manage integration processes ensures that companies achieve the expected financial and operational benefits post-merger.
Hiring a Freelance M&A Consultant
The upward trend in M&A deal values is accompanied by escalating costs associated with M&A activities. For instance, integration expenses have become a substantial component of the overall deal expenditure. In the consumer sector, integration costs have reached a median of 7.5% of the target’s revenue, driven by initiatives focusing on product innovations. Similarly, technology, media, and telecommunications companies reported median integration costs exceeding 5.6% of the target’s revenue.
To manage these rising costs, many companies are turning to freelance M&A consultants as a cost-effective alternative to traditional consulting firms. Engaging freelancers offers several advantages:
- Cost Efficiency: Hiring freelancers can be significantly more cost-effective, with reports indicating that it costs approximately 65% less than engaging a full consulting team.
- Flexibility and Agility: Freelancers can scale resources up or down based on project demands, allowing companies to adapt quickly to changing needs. Nearly 80% of employers plan to increase their use of freelancers, citing flexibility as a key benefit.
- Specialized Expertise: Freelance M&A consultants often possess deep industry knowledge and can offer tailored approaches to navigating complex deal processes.
By leveraging the expertise of freelance M&A consultants, companies can better manage the increasing costs associated with mergers and acquisitions, ensuring a more efficient and cost-effective transaction process.
