M&A Strategy Services

Due Diligence consists in the process of verifying the key preliminary information received about the Target Company, as well as assessing the potential risks related to the Company’s activities and past practices that may result in potential liabilities in the future.

For an effective due diligence process, an online data room is established to provide access to detailed information about the Company.

This process typically covers several areas of Diligence, such as:

Operational
Assess and review the key control systems and management, analyzing strengths and potential weaknesses that may need to be addressed.

Accounting/Financial
Examination of financial statements, cross-checking them against the generally accepted accounting practices and with the initial information provided. This also includes the assessment of potential financial liabilities, risks and their impact on pricing.

Tax
Review if the company has properly fulfilled all tax obligations. Analyzing potential risks related to an eventual misconduct which could result in a potential liability in the future, affecting the new shareholders and potentially compromising the initially expected return on investment.

Legal
Assessment of company’s registrations, licenses, permits, authorizations and regulatory aspects associated with its operations. Review of contracts with clients, suppliers, creditors and others related to commitments assumed by the company.

Developing M&A strategy

Understand the shareholders' goals. Aligning expectations regarding reasons for M&A, exit plan, desired buyers, timeline, percentage of shares being sold etc.

Assessment of company operations

Preliminary Due Diligence, SWOT analysis and development of a valuation model based on normalized historical results, economic outlooks, and industry-specific forecasts. There are several valuation methods available but three of them can be highlighted since they are the most commonly used considering specific needs.

Income Approach

Market Approach

Asset Approach

Preparation of offering materials

Creation of marketing material consisting of a “Teaser” and a “Confidential Information Memorandum”. The information in the Info Memo should be sufficient to the potential buyer assess and make an offer.

Assistance in identifying prospective acquirers

Developing a short-list of potential buyers (Strategic and/or Financial buyer) and pro-actively approach to confidentially present them the opportunity.

Evaluation of proposals

Analysis and negotiation of formal proposals received from interested buyers in terms of timing, price, payment structure, potential adjustments (e.g. Ebitda, Working Capital, Minimum Cash, Debt etc), source of funds, guarantees and more.

Due diligence preparation, guidance, and responses

If the offer is accepted we start with exclusive access to the formal Due Diligence, coordinating and managing the process, ensuring that all necessary information is prepared, guiding the team and addressing inquiries from potential acquirer.

Data room development and management

Organizing and maintaining a secure virtual data room during the due diligence process.

Transaction negotiation and consummation support

Negotiation of the final price and conditions of the final transaction document. That’s includes:

Final findings of Due Diligence (Price adjustments and holdbacks)

Representation and warranties of the buyer and seller

Establishment of any penalties for non-compliance

Description of the mechanism for paying the purchase price

Preparation of SPA schedules

No two transactions are the same – which is why, at Crowe MacKay, we don’t just pull a plan off the shelf. Powered by our extensive experience and supported by our deep knowledge, our team can help you negotiate and structure a transaction based on your specific needs. Whether you’re looking for end-to-end transaction support or require assistance in just a few areas, we offer a variety of sell-side services.

M&A strategy development

Understand the deal strategy and key criteria, aligning with what acquirer expect to gain from making the acquisition and identifying potential targets.

Target screening and selection

Identify, contact and select potential targets that meet the selection criteria and appear to offer a good value.

Dynamic financial modeling

After receiving substantial financial information, perform a valuation analysis that considers potential synergies identified by the acquirer and the financing strategy for the acquisition.

Letter of intent development

Construct a reasonable offer in collaboration with lawyers, negotiating terms, conditions and key aspects such as payment structure, covenants, timing of due diligence, exclusivity etc.

Management of Due Diligence processes

Conduct a detailed examination of the target’s operations and financials to confirm the accuracy of the target’s assessed value.

Transaction negotiation and consummation support

Negotiation of the final price and conditions of the final transaction document. That’s includes:

• Final findings of Due Diligence (Price adjustments and holdbacks)
• Representation and warranties of the buyer and seller
• Establishment of any penalties for non-compliance
• Description of the mechanism for paying the purchase price
• Preparation of SPA schedules