Transactions

Mergers & Acquisitions and Private Equity Deals

Challenges

Acquisitions come into play when the potential for organic growth is restricted.

However, the majority of mergers and acquisitions do not create shareholder value.

• Deals are decoupled from the corporate strategy and fail to acquire the right capabilities.

• Synergies are overestimated and a large premium is paid purely in the name of growth.

• Cultural issues hamper post-merger integration, and a long integration process disrupts the core business, and revenue synergies suffer from a lack of attention

This could be aggravated in the current market conditions:

• Digital disruptions and the emergence of new players entice companies to continue to seek technology assets externally, despite geopolitical uncertainties.

• Good acquisition opportunities are becoming rare and expensive, whilst corporate balance sheets are cash rich and debt providers still happy to lend money.

Solutions

Acquirers should focus on value creation along the entire M&A cycle. We help our private equity and corporate clients at each phase of their acquisitions:

Deal Preparation

I. Industry review

• We analyse the economy and the sector dynamics, and we identify the valuable parts of the industry chain
  

II. Deal strategy

• We identify the shareholder value drivers, develop a deal strategy aligned with the corporate strategy, and outline the target markets
  

III. Target identification and valuation

• We investigate opportunities matching the portfolio strategy and the target business mode

• We identify and value acquisition targets, and assess their markets and capabilities

Deal Execution

I. Commercial due diligence

• We review the market, customers, strategy, and management team

• We identify risks, intrinsic performance improvement opportunities, and potential synergies with the acquirer

II. Deal Pricing

• We review the financial forecast, value the chosen target, estimate the potential synergies, and determine the pricing range

III. Negotiations Support

• We assist with assessing the vendor expectations, facilitating the decision-making process, negotiating commercial terms, and preparing the Sale and purchase agreement (SPA)

Post-Merger Integration

I. Integration Strategy

• We define the strategy and business model of the new company, determine shareholder value driver targets for the deal, and set merger integration principles

II. Integration planning

• We prepare the plan for Day 1, the 100-day plan, and the merger integration plan, which focuses on the deal value target and includes people and culture change management aspects

III. Deal implementation

• We manage specific value-enhancement projects and the overarching integration programme

Projects

TMT Sector

• American multinational technology company, commercial due diligence for an investment in metro fibre in Sub-Saharan Africa

• Large UK services company, transition planning of the acquisition of a major Indian FS BPO company

• Global Coordinators, market study for the due diligence of a Gabonese telecom operator

• Venture Capital fund, valuation and advisory services

• Vulture Fund, target selection

Other Sectors

• Financial Services groups, industry and business reviews for M&A deals

• Private equity house, proposal for the due diligence of a leading global manufacturer of machinery

• Private Equity organisation, Commercial Due Diligence

• FMCG company, acquisition valuation

• Professional Services Firm, strategy and acquisition assessment

• Middle-Eastern Family Office, London Property Market Study

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