What is Deal Advisory?

You are probably most familiar with the term “deal advisory” when referencing KPMG and PWC services. While there are hundreds of firms that offer these services (including Deloitte and EY), there are several different names for deal advisory including transaction advisory, M&A consulting, M&A advisory, advisory, and transaction advisory services.

Deal Advisory refers to a specialized type of service offering within the financial and accounting industry. Deal advisory services all revolve around M&A transactions (or “deals”). These services encompass a broad range of strategic services including identifying, evaluating, and executing M&A deals. This can also include divestitures, joint ventures, strategic alliances, and other transactions. 

Deal Advisory Services

  • Due Diligence: The most common type of service offered by deal advisory professionals is due diligence. Due diligence is the process of evaluating the financial, operational, legal, and commercial aspects of an M&A transaction. Diligence is a key step in the M&A process because it helps buyers develop a clear understanding of the target company’s financial performance, growth potential, and risks. Common types of due diligence services include financial due diligence, legal due diligence, operational due diligence, commercial due diligence, and tax due diligence.
  • Valuation: Deal advisory also can include business valuation services. These services help buyers determine the value of a business. Deal Advisory teams use several different methods to value the business and must consider factors such as historical and projected financial performance, market conditions, and future growth prospects. The big 4 firms possess extensive experience in valuing businesses, helping clients arrive at fair and competitive prices for acquisitions or divestitures.
  • Transaction Negotiation and Structuring: Developing the optimal deal structure and negotiating favorable terms requires specialized expertise from deal advisory professionals. Deal Advisory professionals provide strategic guidance in structuring transactions, considering tax implications, regulatory requirements, and financing options. Professionals leverage their vast networks and industry knowledge to facilitate negotiations that result in mutually beneficial outcomes for buyers and sellers.
  • Deal Execution and Integration: The successful execution of a deal is crucial to realizing its anticipated benefits. Deal Advisory teams work closely with clients to oversee the implementation of the transaction, coordinating legal, financial, and operational activities. This includes post-transaction integration services, ensuring a smooth transition and enabling the newly formed entity to operate seamlessly.
  • Tax Advisory: Recognizing the significant impact of taxes on business transactions, deal advisory professionals also offer tax advisory services to ensure tax-efficient deal structures. Their tax professionals assess the tax implications.

Deal Advisory is an important role in successfully executing an M&A transaction. Deal advisory professionals assist businesses in navigating complex transactions and achieving their strategic objectives. This field requires a unique blend of financial expertise, industry knowledge, and negotiation skills. The professionals in Deal Advisory provide invaluable guidance and support throughout the deal lifecycle, from initial identification to due diligence, valuation, negotiation, and ultimately, deal execution. By leveraging their insights and experience, organizations can make informed decisions, minimize risks, and maximize value creation.

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