The acquisition and integration of a foreign company is a herculean task that is subject to a complex, multi-step process. Numerous different work streams must be handled simultaneously; there are countless aspects to take account of with merger & acquisition activities.
Aspects & Course of a Corporate Transaction
The first step in the acquisition of a company is always an assessment of the strategic fit. Do the buyer and the bought company fit together? Can synergies be generated? What might this look like and what are the consequences if the company available for sale is possibly acquired by a competitor? These questions are addressed prior to the actual process. Due to the amount of information at this time, the analysis does not yet go into great depth. When the first indicative offer has been made, however, and the data room opened, then things begin to heat up.
- Depending on the size of the transaction, various due diligence reports must be prepared. Risks on the commercial, tax, legal, and financial side must be identified. The subjects must be coordinated in dialog with (accounting, controlling, operations), corporate finance, management, and possibly the strategy department.
- Questions from various working areas of the due diligence must be included in a Q&A list that is then sent to the seller. Often, the number of questions is limited so that a pre-selection must take place.
- If the transaction is a large one, then there is the question of financing. It is necessary to review banks for the financing and to provide the selected bank with the information necessary for the loan approval check.
- The purchasing agreement is the core document in the transaction. The risks identified in the various working areas require appropriate consideration. As a result, it is necessary to consult the contracted law firm.
- All opportunities and risks must also be included in the business plan, which is the basis for the corporate valuation where the maximum price to be paid for the company to be acquired is identified. In preparation of the business plan, it is necessary to quantify the identified synergies that will result from the merger.
The analysis of this information and coordination between the various parties has a prominent place in the overall assessment of the potential target company. Furthermore, the entire process is subject to great time pressure – usually the time window for the first and possibly second round of bidders is only a few weeks. As a result, the buyer faces the risk that important subjects are not identified in due time or investment opportunities are missed if the buyer's relevant departments are too small or there is a general lack of experience in the M&A process.
M&A Process and Execution of Transaction with FAS AG
A successful factor for the safe and sustainable execution of a transaction is not only technical competency, but also sufficient availability in terms of capacities and appropriate expertise. These requirements are met by FAS AG since our experienced advisors have the necessary holistic expertise and will support you along the acquisition value chain during the entire execution of the transaction. This relates to the core tasks of the process and M&A project management, and extends from the first consultation when the indicative offer is submitted to all the phases of the M&A process and ultimately the final post-merger integration.
M&A Support Provided by FAS AG
In your transaction, you will benefit from the expertise we have gained as part of handling numerous due diligence reports. Together with our tax and legal cooperation partners, we will provide you with all the support from one source, also in regard to legal and tax questions. At the same time, we will ensure, by providing support for the Q&A coordination, that the necessary information is available to the experts for commercial due diligence and to all other specialists working on the project. This combined information then flows into the business plan that we will prepare for you in a proprietary, professional finance model with different scenarios. In the process, identified synergies and carve-out subjects are naturally taken into account as well. As the principal in the transaction, you can work with FAS AG as an advisory partner in order to concentrate on the strategic components of the transaction and to be exceptionally well prepared for entering into negotiations with the seller.
Support for Small Transactions
Even in the case of M&A deals involving SMEs where their value does not warrant the performance of a complete M&A process, we would be glad to support you with our consulting experts. Often, red flag due diligence is enough for a very small transaction. We will inform you about the identified risks in this regard by preparing a concise and focused report.