Mergers and acquisitions represent some of the most critical transactions for corporate directors and officers. Not only do many companies not have sufficient internal resources to successfully identify, structure and close an M&A transaction without outside advice, most companies do not have personnel with a broad range of deal experience to handle a transaction in the best way rather than the usual way. Whether your firm is a prospective purchaser (the buy-side) or a potential seller (the sell-side), our services can dramatically increase your likelihood of successfully identifying, negotiating, structuring, investigating, documenting, closing, and integrating an acquisition.
What differentiates us from other M&A firms is that we bring a culture of high standards, attention to detail, and discipline to every phase of the transaction. This culture has been part of our professionals’ lives for over 15 years. We’ll identify some specific issues below to give you concrete examples where our approach differs from other boutique firms.
In today’s fluid and skeptical deal environment, transactions can be stalled or even derailed by poor planning, insufficient analysis, and laissez-faire deal management. While some financial professionals want make every deal go through to safeguard their contingency fee, other deal participants seem to look for every reason to kill a deal so they can appear to be working in your best interests.
Our approach is different. By beginning every M&A engagement with a solid analysis of the underlying deal rationale (Are you seeking international growth? Is this deal a means to avoid family succession problems? Do you need new technology? Do you need to release your product through a strategic partner?), we identify the key characteristics of likely successful deals with you before the search phase even begins.
We know the pace of deals. We know that you may not have the luxury of time to oversee our process or to respond to a plethora of CYA-type reports. First, we take great pride in our ability to get the job done on time, on your timetable. Second, you get the reports you want, when you want them. Some executives want constant contact and raw data; others want only the bottom line about potential dealbreakers. We will accomplish the tasks you set forth under the conditions you specify and meet your standards for success.
Buyers need a completely different viewpoint from sellers. As a company looking for an acquisition target, you have many specific questions that should be answered before the search phase even begins. Most of these questions revolve around strategic issues such as what type of company you’re looking for, what strategic (or, in some cases, tactical) benefit the acquisition should bring to you, and how you expect to reap value from the acquired company. It is often reported that most M&A deals fail to deliver value for the acquirer. Our experience tells us that this outcome is driven by two main factors: first, giving all the benefits away up front in terms of excessive target premium and second, failure to plan for post-merger integration during the diligence phase.
Here are the typical steps a firm would go through in the buy-side deal process:
- Confirm M&A strategy
- Develop industry and market analysis
- Determine key screening criteria, target list, and communication plan
- Profile key targets
- Due diligence — In conjunction with the other members of your advisory team (accounting & legal) as well as with your internal diligence team, we lead the investigation into the following major areas:
- Accounting due diligence
- Legal due diligence
- Commercial due diligence
- Organizational due diligence
- Deal execution, negotiation, structuring, and financing
- Post-merger integration
When beginning a sell-side engagement, the most important issue for us is understanding the motivation behind the sale. Sometimes, owners think they have to sell when they can’t sort out a management dispute, or resolve a family succession dilemma, or get needed liquidity. Not only are some of these issues fixable through other means, but the type and terms of the sale, everything from who makes a suitable buyer to how the sale price should be structured, are affected by the background issues driving the seller’s decision. We work with you to develop a clear sense of your desired end-state, how things should look after the deal, so that we can all keep that goal in mind as we make decisions along the way.
Once we have worked through your motivation as a seller and helped you define success, we move on to the following steps:
- Assessment of the business
- Offering memorandum
- Diligence preparation
- Marketing the company
- Engaging the buyer
- Deal execution