Last edited 04 Dec 2020

Corporate finance

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In the UK, the term 'corporate finance' generally refers to transactions in which capital is generated in order to create, develop, expand or acquire a business. It is typically associated with a corporate transaction that results in a revised equity structure or shareholder base, an ownership change in a business, along with the related issue underwriting, purchase or exchange of equity (and related warrants) or debt.

A corporate finance may be part of the following activities:

Mergers and acquisitions:

Formulating an acquisition strategy, assessing targets and funding an acquisition.
Undertaking negotiations with vendors and due diligence.
Provision of advice on tax and the commercial aspects of deal structures.
Implementation of a post-acquisition plan.

Management buy-outs/ins:

Undertaking an assessment of the viability of a management buy- out proposition and business plan.
Business valuation, deal structure, securing finance and tax planning.
Project management of the transaction.

Disposals:

Preparing the business for sale and developing an exit strategy.
Undertaking research and making confidential approaches to potential buyers.
Negotiating and project managing the transaction.
Providing taxation and financial planning advice.

The range of roles involved in corporate finance might include:

Corporate finance advisers: Generally working within an investment bank, accountancy/professional services firm or an independent advisory firm. Individual's may work as consultants.
Reporting accountants: Accountants that work for the buyer, business investor or specialist investment fund to verify that the accounts of the target company are accurate and up-to-date.
Lawyers: Providing specialist advise on corporate finance transactions.
Private equity providers: Professionals involved with buying/selling/provision of finance to businesses.
Debt providers/bankers: Specialists who are involved in corporate finance transactions.
Brokers: Provide advice on and assist with raising capital for transactions.

The Institute of Chartered Accountants in England and Wales (ICAEW) has a corporate finance faculty and is a large professional membership body that supports chartered accountants around the world.