How to secure the best deal for your future
Mergers and acquisitions (M&A) are a powerful way for growing companies to propel themselves forward and also for sellers to secure the financial future of their families and companies.
The appetite for well-considered strategic deals continues to buck global trends, especially among mid-sized firms. In the past year alone dealmakers in the Moore Global Corporate Finance (GCF) network have advised on more than 450 deals with a combined value of €5.3 billion.
Those transactions typically contain the same crucial ingredients for success:
- They enabled acquiring companies to increase scale, expand faster and add new revenue streams.
- For selling shareholders, they struck a balance between extracting value and ensuring continuity for both the business and its staff.
- For entrepreneurs, being acquired can quickly move their companies to the next level of competitiveness and position them for a sustainable future.
Moore GCF works mainly with business owners, entrepreneurs and management teams who have spent years patiently building strong foundations for their companies and growing organically. Often advisors from GCF firms have been alongside them throughout the journey helping to refine their business models or develop specific strengths in order to stand out.
GCF prioritises companies with revenues of €10 million to €200 million that are the backbone of the global economy. These firms would traditionally have focused on buying local rivals – or selling to bigger players in their home markets – but the opportunities offered by cross-border M&A are increasingly attractive.
Research for GCF by Vlerick Business School in Brussels shows there were around 4,250 of these deals last year in Europe worth a total of €200 billion.
Firms within Moore Global Corporate Finance are reporting high levels of pent-up demand from potential acquirers eager to make strategic acquisitions – with US buyers among the most active but also growing interest from Asia.
Targets include businesses that operate in the same sector as the potential acquirer, or those that offer avenues into related products and services and have potential to generate additional revenue streams.
Grasping the strategic logic for embarking on M&A is one thing: making it happen and maximising the benefits requires months of effort and a range of finance and legal expertise.
Due diligence on a potential partner is highly complex and requires in-depth local knowledge as well as sophisticated financial modelling to understand the commercial drivers of the business.
Cross-border transactions often throw up legal, tax and regulatory issues that can have an impact on how the deal needs to be structured and practicalities like future cash flow monitoring.
Understanding the motivation of both parties to the agreement is often overlooked, yet this can be the difference between success and failure. This human aspect goes way beyond the people round the negotiation table: optimising future performance of the acquired company’s workforce or merging teams together is every bit as important as closing the deal.
Many mid-sized companies are reliant on a single finance director, or even the owner, to stay on top of all the complexities and make the dozens of hourly or daily decisions that are required to push a transaction over the line.
It is a huge responsibility – one that puts individuals under intense pressure. However, Moore Global Corporate Finance brings together the power of its international network to relieve that stress and seamlessly handle all elements of the deal.
Moore GCF assembles specialist teams that understand the many issues that can cause delays. Advisors can assist at any stage of the process, from pre-deal evaluation and due diligence through to the completion of a transaction and post-deal integration or separation.
While experts from two or more countries might be involved, the client only has to deal with one main point of contact. Whether they are buyers or sellers, this approach makes for complete transparency and quick decision-making – factors that are vital to ensure a successful long-term outcome. Contact the Moore Kingston Smith Corporate Finance team (part of Moore GCF) to find out how we can help your business.