As a growing business you will have recognised that you can only grow so far by organic growth alone.
The next stage in your plans may therefore be to acquire a smaller company, merge with a competitor or ambitiously buy out a larger competitor. The David and Goliath approach can work but needs careful planning and the ability to finance.
RMT’s specialised Corporate Finance team can work with you to:
- refine your growth plans
- look for acquisitions
- assess offer prices
- raise finance
- negotiate the deal for you
- help you plan the integration
Whilst it is often left until after acquisition, integration will make or break your acquisition process. Understanding what value your company can gain from an acquisition early on in the process will assist you both pricing the company correctly as well as indicating areas which you will need to plan during the process.
Acquisition Targets
Our approach to acquisitions is pro-active and we find that by approaching companies on a prospective basis often brings out interesting opportunities for clients. Confidentiality is paramount and a client’s name is not divulged until confidentiality letters have signed by all parties.
Finding the right acquisition is key and our dedicated team can work with you to research and identify suitable companies as well as manage the process to ensure you can focus on your business.
Never rush an acquisition because you are concerned the market is contracting. Take time to plan early on so that when you are ready to acquire the process is smooth as possible. We will approach the owners of potential targets for you to find out if they are willing to explore selling their businesses. This will ensure you anonymity as well as assist in finding suitable targets before proceeding further.
Valuing an acquisition
A suitable acquisition has been found but how much should you pay for it? This will depend on both synergies, which can be found between your business and the acquisition as well as the expected profits you can gain from running this new acquisition. We will work with you to carry out a valuation of the target business, model the financial effects on your business as well as help you to identify key synergies.
Once a suitable target has been identified and an idea of potential value has been determined our team will be negotiating all aspects of the transaction with the potential target and project manage the other parties i.e. other advisers / lawyers / banks etc…
The management of this process is crucial to the smooth running of any transaction. Our team have all had extensive experience in negotiating acquisitions on behalf of clients.
Due diligence
You will now need to undertake a thorough due diligence review on the acquisition target, which will involve investigating the financial, operational and legal position of the company.
We will help manage this process, which can either be carried out by our Transaction Support Services team or by an independent team if required by a bank. Our Transaction Support Services team carry out due diligence exercises for banks and venture capitalists please see their pages for details of what to expect.
Due diligence is finished and the finishing post is in sight. The legal documentation will have started during the due diligence phase and will involve many meetings with the legal team. We will project manage the process and attend the meetings with the lawyers. The completion date will arrive when all parties have agreed on legal documentation and terms on which the deal has been struck. A number of points often get left to the last completion meeting though we will aim to keep these to a minimum.
Completion
Completion will bring with it a range of other considerations you will have to deal with not least what you will do with all that free time you have. After a well-earned holiday possibly it is time to think about buying a new business!
Our experienced team would be happy to share their experiences of managing acquisitions and help you to plan and prepare for buying a business.
