Every business needs to take strategic decisions relating to finance, investment, divestment, structuring and expansion in the various stages of the corporate lifecycle. The corporate advisory services provide the foundation for strategic decision making and help the companies with transactional support in executing the decisions made during the different parts of a business’s lifecycle (i.e., start up, growth, and exit).
Companies have internal teams, an advisory board, that are comprised of multi-domain specialists assisting with such strategic decisions or may seek the services of specialist service providers such as consultants or other networks.
Regardless of whether a company has an in-house team or outsources the service the objective is to maximise the beneficial outcomes of the company’s decision and increase the value of the business to achieve its vision. Having access to quality advice is inherent to running successful businesses. Typically, companies seek advisory services in the following areas:
- Corporate structuring – company incorporation, evaluation of group structure, assessment of tax efficiency, potential alternatives, advice in the area of transfer pricing, etc.
Ensure proper financial management for your business needs, whether it be during restructuring or during relocation by consulting qualified tax advisory services.
- Company/ asset valuation – evaluation of capital structure, nature of assets, financing of assets, current earnings, potential earnings, perceived market value, etc.
- Capital funding – structuring capital, adequacy, fundraising, plan and manage offering process, advice on the impact of debt financing on the company’s financial position and result.
- Mergers and acquisitions – target evaluation, due diligence, deal structuring, completion, post-deal integration service, etc.
Consult an experienced tax advisory services provider who can carry out financial due diligence.
- Initial Public Offering – Assess the company’s listing feasibility, advise on listing implications, streamline structures, review and recommend improvements to financial management systems, advice on IPO strategy and IPO planning, assist in compiling prospectus, etc.
- Investment management – business protection, transformation, conservation and growth of business and shareholder value, risk assessment, etc.
- Disposal and exit planning – evaluation of options, carve out, deal structure, buyer suitability, negotiation and closing, transition and repositioning.
Factors Influencing Corporate Advisory
The corporate advisors hinge their recommendations based on the analysis of the macro and micro factors that could determine the options available as well as the choice, method of implementation and the outcome of the decisions made. Besides what happens in the macro ecosystem of the company, the critical elements of the company will also influence the recommendations of corporate advisors. It is the role of the corporate advisors to draw the attention of the company to the macro and micro factors and drive the company’s decisions in the right direction.
- The geopolitical situation that prevails locally, nationally, regionally and internationally would limit or affect the viable solutions to a company. When there is political unrest, and the policy direction is not evident in a country, it is not advisable to expand into the market or increase investment stakes in the market.
- The economic situation, as well as the industry’s commercial cycle, must be evaluated to determine the right option and the execution strategy. For instance, when the capital market is tight or when the industry is going through a cyclical lull, it will not be a prudent option to take the company public.
- Technology could also potentially influence a company’s decision. For example, in a country where the mobile penetration and broadband usage is on the rise, the company would likely benefit by increasing its focus on online advertising and distribution channel but may have to stick to conventional methods in a country where the technological advancement is yet to catch on.
- A corporate advisor would recommend solutions taking into consideration any signs of looming bubbles or recessionary trends. For example, when a market is overheated, the implications of any regulatory changes to cool the market or withdrawal of stimulus would be analysed before making recommendations.
- The risk profile, organisational ethos and philosophy of a company would also influence the recommendations of the advisors. The organisation’s fit to a potential solution depends on its nature, for instance, a company that values nature conservation cannot possibly find a viable business by acquiring a company that faces litigations for having violated environmental regulations.
- Financials of a company would largely determine the advisory options. For instance, a company that has a low debt to equity ratio could potentially benefit from financing a deal through debt. Leveraging with debt capital could help it to channelise the available funds to grow further or expand its business, and the low financing rate would also enhance its profitability than opting for equity finance.
- The performance outlook of a company in a given competitive and technological landscape and the stage of the market could also influence the advisory. For instance, a company operating in a highly saturated market could have limited options of growing its revenue by introducing a newer version of its core product. But could achieve a breakthrough by acquiring a disruptive startup.
- The corporate structure of a company could also impact the advisory services. For instance, a holding company that is procuring supplies from its subsidiary’s associates or group companies may have to review its costs and adjust pricing to ensure compliance with transfer pricing rules. Besides the company’s accounting, legal and tax strategy would also influence the available options.
- Competitor Landscape is another micro factor that would affect the options available to a company. In the context of a company entering a new market where there is stiff competition, instead of making direct head-on entry, the company could consolidate its position by buying small but active local players.
The Need for Corporate Advisory
Corporate advisors act as a sounding board for the management. The advisors will be able to offer a fresh perspective on the problems and decisions of the company, which will be able to make failsafe choices by taking inputs and recommendations from the advisors. The management may be preoccupied with the company and the industry, but the advisors would be able to provide objective opinions based on multi-dimensional analysis and in some cases, they may be privy to specific industry and economic data that could be pertinent to decision making. More importantly, Corporate advisory service provides access to diagnostic controls that monitor performance and suggests improvements when a recommendation is implemented. Thus, Corporate advisory essentially helps a company achieve its vision successfully. Learn more for each advisory below:
Leverage expert corporate advisory services to run your business smoothly
As part of corporate advisory services in Singapore, our restructuring team also assist clients in business turnaround, investigation and insolvency.