Boutique M&A

We meet the company shareholders and / or the management team to understand the business in detail. We review all aspects of the business including financial data & KPI’s together with understanding the product / service and its competitive USP. In particular, we take time to really understand the markets the business operates in. This takes place at the client’s organisation and is conducted under non-disclosure so that all data is protected. We understand the sensitivity of the work involved and we are used to ensuring a high-level of confidentiality.

Together with the client, we identify what industries would be most aligned to the type of business our client operates in. We identify where synergy would be created by an acquisition of our client’s business - e.g. with a competitor, or an aligned industry. We take any company names that our client suggests and we then build a detailed research brief on the ideal target together with a defined geographic scope. We will identify specific criteria such as company size, activity as well as financial criteria that provides evidence of prior or desired M&A activity. Our industry experience within our target sectors often means that we are able to widen the research brief into areas our clients had not previously considered.

We use the market insight developed above as a guide to research the market for individual companies that meet the criteria. We work within the limits of the geographic scope - some searches are local (e.g. UK), some are global. We use a variety of proprietary databases, search engines, industry trade & credit directories to identify company names that meet our search criteria. For international searches, we will search using both English and the local language to ensure that each search is forensic in nature. This process typically takes 4 - 6 weeks and will create long-lists of several hundred or more potential candidates. This list will then be analysed by a senior Director comparing the financial metrics such as P&L and Balance Sheet to produce a short-list of potential candidates. This short-list will be reviewed by the client to assess viability together with any extra additions / deletions. Once a short-list is agreed, we will then conduct a further wave of research to identify the ‘decision-making team’ - usually the CEO / President and associated colleagues (e.g. Head of M&A) and their respective contact details. We will often complement this bespoke list with names of companies and private equity firms who may be interested to review the opportunity.

We will analyse clients' historical financial statements - profit and loss (P&L), balance sheet, supporting management information and key performance indicators (KPI’s). We prepare a pro-forma summary showing cash-free debt-free statements and will help model future income statements. Our analysis will also uncover data such as working capital trends and aspects of the balance sheet that could be re-structured to optimise an exit position. Our analysis will provide a pre-tax indication of debt-free cash-free disbursements based on a range of valuation indexes.

We use data collected during the initial meetings to create a compelling Information Memorandum (IM). Where required, we can commission photography for any supporting visuals. Using the financial analysis prepared earlier, we prepare a detailed overview of the business, its operations and its USP. The IM is designed using Adobe InDesign with any supporting visuals to produce a very high-quality luxury look-and-feel PDF together with a supporting narrative that demonstrates reasons how and why the business would make a strong acquisition project. The IM is reviewed at various stages and signed off by the client.

Once we have a launch date, we will contact all the individuals and contacts on our shortlist. This will be handled by our Senior Team personally to connect with the appropriate decision maker. This outreach is conducted anonymously with the goal to solicit interest to review in detail. Having taken the time to understand our client’s business right from the outset, we are well-placed to discuss with CEO’s etc. on the merits of acquiring our client’s business and the potential synergies available as part of a deal. Once interest is confirmed, we will issue a non-disclosure agreement (NDA) and once signed, the IM can be released for review.

We will discuss and develop interest with all interested parties. Where required, we will facilitate and conduct management meetings between the potential buyer(s) and our client at a suitable location. We help our clients prepare and will guide them through the process. We will then solicit non-binding offers from interested parties and will negotiate to optimise any offer. After receiving final non-binding offers, we will liaise with our client for them to select one party to engage with and lay down heads-of-terms. On behalf of our clients, we will bring our commercial experience to bear to ensure that heads-of-terms and the overall offer are competitively positioned.

The buyer will wish to conduct due-diligence, so our clients will select the appropriate tax, accounting and legal advisors to support them through the due diligence process. We will project manage the whole process for our client, liaising both with buy-side and sell-side teams throughout. In particular, we work very closely with our client’s legal team to ensure the appropriate level of “commercial input” on behalf of our clients in the construction of the sale and purchase agreement (SPA). We oversee the project all the way until the point of closing.