Corporate finance varies across the world and deals with decisions and techniques that deal with many aspects of a company’s finances and capital.
In some countries corporate finance deals with transactions in which capital is raised in order to create, develop, grow or acquire businesses connected to a corporate transaction that leads to the creation of a new equity structure or shareholder base, and the related issue, underwriting, purchase or exchange of equity (and related warrants) or debt.
Types of transactions
Raising seed, start-up, development or expansion capital
Mergers, demergers, acquisitions or the sale of private companies
Mergers, demergers and takeovers of public companies, including public-to-private deals
Management buy-out, buy-in or similar of companies, divisions or subsidiaries – typically backed by private equity
Equity issues by companies, including the flotation of companies on a recognised stock exchange in order to raise capital for development and/or to restructure ownership
Raising capital via the issue of other forms of equity, debt and related securities for the refinancing and restructuring of businesses
Raising capital for specialist corporate investment funds, such as private equity, venture capital, real estate and infrastructure funds
Secondary equity issues, whether by means of private placing or further issues on a stock market, especially where linked to one of the transactions listed above
Raising debt and restructuring debt, especially when linked to the types of transactions listed above
Corporate Finance advisers
In the UK, the term generally refers to those who act as advisers on the types of transactions listed above. This may also include sponsors or nominated advisers for IPOs.
Such lead advisers may be from investment banks, accountancy/professional services firms or independent advisory firms (sometimes known as “boutiques”). In some cases, they may also include individual consultants who specialise in such work.
Reporting accountants (ie those who carry out financial due diligence or transaction support)
Accountants employed by the buyer of or investor in a business or a specialist investment fund to ensure that the financial workings of the target company are fully disclosed and are in order. The scope of such work can be driven by the requirements of the investor/buyer, or by regulation, and the reports issued can be private or public, depending on the circumstances.
Solicitors who are primarily involved in advising on the types of transaction listed above, including legal due diligence.
Private equity providers
Private equity/venture capital professionals engaged in buying, selling and providing finance to businesses.
Bankers, other debt providers and debt-advisory specialists who are principally involved in the types of transactions listed above.
Brokers who advise on and support raising capital for transactions (IPOs, acquisitions, disposals etc.)
Other due diligence
Other specialist advisers employed to support the types of transaction listed above, if they are primarily engaged in supporting such transactions. Examples include commercial due diligence, environmental due diligence, insurance and other types of consultancy work.
Directors and executives in companies who primarily focus on the types of transactions and projects listed above, in order to support corporate development.