The services offered by M&A Mergers and Acquisitions are aimed at entrepreneurs who wish to sell the company due to lack of succession or to the pressure of an increasingly competitive environment, at companies that wish to incorporate a new partner (venture capital, development capital, family office or strategic partner) to take on a business expansion project, at executives who wish to buy a company by carrying out a management buy-out or buy-in and/or at companies that wish to grow by buying other complementary companies.
Sale of Companies
Selling your business may be the best way to close the cycle of leading a company, since it allows you to turn company assets into cash, while ensuring activities and jobs continue.
This alternative is particularly worth considering when:
- The businessperson has no family succession.
- The company enjoys a favourable outlook but lacks the financial resources to develop it.
- The businessperson perceives that his company is not ready for such a competitive and global environment.
- The businessman believes that he has achieved his objectives, or do not feel the motivation to continue to lead the company.
- The company experience the consequences of differences between partners, that can reduce the value of the company.
Bringing in Shareholders
There are many situations where bringing a minority shareholder into the business is a good idea. These include when a minority shareholder:
- Represents a previous step to selling the entire company.
- Is a strategic option to bring in more resources (economic, commercial, productive, etc.) to reinforce the company as a whole.
- Brings rationality and orthodoxy to companies where differences have arisen between shareholders.
Venture Capital / Private Equity
Financing companies are increasingly becoming the ideal partner for a business owner, since their contribution makes it possible to take full advantage of the possibilities of the business, as they accompany it in its expansion phase.
A financial shareholder can offer you:
- Financing through increased own resources.
- Access to financial markets under advantageous conditions.
- Access to possible technological or commercial partners on a global scale.
- Orthodoxy in the management and running of the company, which is crucial in the expansion phase.
Management Buy Out (MBO)
Business owners wishing to sell their companies will sometimes consider whether the management team could be the ideal buyer. This is the case in a management buyout, where the leading managers buy the company. In order for this to take place successfully, the following circumstances should be in place:
- The managers have the personality needed to assume the role of business owner.
- The management team is able to finance at least part of the acquisition.
- The company and its managers generate, where applicable, the necessary trust to obtain bank financing or attract a financing shareholder, to enable the total purchase cost to be covered.
Management Buy-In (MBI)
When the manager or management team that buys the business does not work there. They are normally backed by a private equity firm or a family office. In addition, part of the acquisition is normally financed by a long-term bank loan.
Buying a company may be the ideal option when your aim is to achieve one of the following objectives:
- Quickly acquire greater size and better strategic positioning.
- Quickly enter new geographic markets.
- Take advantage of the traditional core of the business to achieve synergies through the right diversification.
- Consolidate market position to later sell the business at a better price in the medium term.
Valuation of Companies
Before seeking a buyer or minority shareholder the value of the company must be determined. A value estimation is also indispensable if shares are to be sold between members, or in any of the diverse circumstances that can lead to share exchanges. The section What is my company worth? discusses this matter in greater detail.
An option that may suit companies looking to grow and become more competitive through revenue and/or cost synergies is merging with another company that complements its market and/or product. You need to start by finding the ideal partner and then negotiate a satisfactory agreement with them as regards the value of the businesses and shareholder agreements.