Working with Expert Advisers

Part 4 – Planning a business acquisition

Depending on the nature of the Target, the characteristics of the Acquirer the scope of work to be completed by the Advisory Team it may be that specialist advisers (Expert Advisers) are to be retained.

What is an Expert Adviser?

In the context of a business Acquisition, a specialist adviser (Expert Adviser) is “a person engaged by the Acquirer to provide an expert report necessary to make a decision about whether or not to proceed with the Acquisition of the Target”.  If required the Expert Adviser may be a member of the Advisory team or their involvement may be bespoke to advise on a particular issue required to be completed for the Acquisition to proceed to completion.

It is an unusual business Acquisition which does not have a Lawyer, an Accountant and a Management Representative involved. Therefore, an alternative definition of Expert Adviser is one that is not a Lawyer, an Accountant or a Management Representative!

Types of Expert Advisers

There are various categories of Expert Advisors including but not limited to:

• Information technology consultants;
• Industry experts;
• Insurance brokers;
• Scientists;
• Specialist Lawyers; and
• Patent Attorneys.

In a lot of businesses based on the expertise of the business owner, it’s possible that Management Representatives possess many of the skills of Expert Advisers. Therefore these in house skills could be utilised, time permitting.

Understanding the work of the Expert Adviser

In order for the Advisory Team and the Lead Consultant to work effectively with the Expert Advisor, the entire Advisory Team needs to understand the role and scope of work to be completed by the Expert Advisor. Therefore at a practical level in the case of larger Acquisitions it is necessary for Expert Advisors to attend meetings of the Advisory Team and whether the work of the Expert Adviser is to become a condition precedent to making the Acquisition.

What work do Experts do in business acquisitions?

For example if the Expert Advisor is required to advise on whether the Target’s patents are likely to proceed to grant, or whether they are likely to be challenged by patent trolls, then the Lead Advisor must understand the following:

• the scope of work to be completed;
• how the Expert intends to go about completing the scope of work;
• the anticipated cost;
• any dependencies which the Expert is relying on to complete the scope of work; or
• whether the Expert Advisor is available during the entire Acquisition process;
• whether the work can proceed independently;
• the anticipated delivery date;
• who the work is to be delivered to;
• how the Expert can be contacted; and
• whether a go/no go opinion is required from the Expert for the Advisory Team’s and subsequently the Acquirer’s consideration.

Some of these issues may appear trite, however when planning an Acquisition it is critical for the Lead Adviser to know if the due date for the Expert’s report is when they are on leave climbing Mount Kilimanjaro!

Further information

If you would like further information about working with expert advisers, contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

---

Related insights about mergers and acquisitions