Process of Selling a Company

INDEX
1. MERGERS & ACQUISITIONS
2. ABOUT US
3. WHY CHOOSE MERCAL
4. SERVICES
5. THE MERCAL METHODOLOGY FOR M&A
6. M&A PROJECTS
1. MERGERS & ACQUISITIONS
MERCAL M&A SERVICES - BUY AND SELL COMPANIES WITH LESS RISK:
•
Competition, fast technical developments and globalization drive M&A activities;
•
Increasing number of cross-border M&A activities;
•
International transactions are becoming more complex, people in charge are facing new
challenges and risks;
•
Good solutions for succession planning in family owned business often need an international
reach.
•
The experienced of MERCAL professionals support companies/owners in all types of strategic
processes (buying/selling) and in all phases.
2. ABOUT US
Mercal was founded in 1996 in Lisbon and early was expanded internationally having a strong
presence in countries with Portuguese as official language to assist local, regional and nationally
companies.
Mercal belongs to IMCN which is an international experienced network worldwide with several
projects.
Mercal M&A is specialized in company transactions in the mid-market since 2004. We also deal with
solutions for venture capital and equity funds, succession problems of privately owned companies as
well as with Spin-offs of industrial groups.
We maintain the closest relations with financial investors on a national and international scale, who
can facilitate larger transactions for different sectors of industry in Portugal as well as abroad. We
also provide consulting services to financial investors for the implementation of exit strategies.
Our consultants have all the expert knowledge of the different branches of industry you would
expect from experienced business partners.
3. WHY CHOOSE MERCAL
WHY CHOOSE MERCAL?
Independence:
The shares of our group are held privately and to managerial staff. So there are no conflicting
interests and we can act flexibly in the interest of our clients.
Experience:
As one M&A company we can offer our expert knowledge gained over a period of 10 years, in
Africa Brazil and Europe during which we supported various assignments.
Internationality:
With an international presence and as member of IMCN (www.imcn.eu), a network of management
consulting companies we are able to offer our professional services on a global way.
3. WHY CHOOSE MERCAL
Motivation:
As our staff participate in an incentive scheme they are highly motivated and act in an
entrepreneurial spirit in order to offer you the best possible service.
Know-how of various industries:
Having been in business for such a long time, our staff has been able to built up a profound and indepth knowledge of the various industries we are dealing with.
Group of companies:
Our Group and the cooperation between our network and associated companies can offer tailor
made solutions covering all needs.
4. SERVICES
Mercal Consulting Group is active in international business consultancy.
We seek to support our clients with a range of services in our M&A Department which can be
individually tailored to meet specific requirements.
This services include:
Company Evaluation;
Company Sales;
Acquisitions;
Company Restructuring.
5. THE MERCAL METHODOLOGY FOR M&A
COMPANY SALES
1. Procedures
As part of a sales assignment, MERCAL provides the following services:
Discussion and definition of the project objectives
Analysis of the company, preparation of a sales exposé and the supplementary sales documents
Calculation of the company value and the offer price
Definition of the target groups and market research to identify potential buyers
Development of the sales strategy
Confidential approach of potential buyers
Organizing and conducting the negotiations in close cooperation with the client, coordination of the whole
negotiating and selling process
Providing legal and tax advice during the preparation of the contracts involving external lawyers, auditors and tax
advisors
The close cooperation with the client will ensure that his personal objectives in selling the company are duly taken care of
and the best possible negotiating position for our client will be established. In carefully weighing the interests of our client,
we are striving for the optimal balance between the selling price, the security of the agreement, a minimum of taxation
and the matching takeover structures.
Only competent and highly motivated consultants who participate personally in the success of the project will
accompany and advise our clients from the moment the first contact is established until the transaction is finally closed.
5. THE MERCAL METHODOLOGY FOR M&A
2. Solutions of Succession Problems
One of the greatest challenges for the entrepreneur in a small or medium sized business is to
successfully resolve the issue of succession. We know from our long experience how difficult and
emotionally fraught this process can become.
At the beginning, we prepare a comprehensive documentation of the personal situation and the
interests of all company shareholders. On the basis of this list we will then develop an appropriate
strategy to prepare the shareholder structure and the company for the future. Possible scenarios are:
the identification of a successor within the family, possibly by inviting a financial investor
the transfer of the company to the executive management (MBO)
the sale of an interest in or the whole of the company to a suitable buyer or
the widespread placement of interests in the company at a stock exchange
5. THE MERCAL METHODOLOGY FOR M&A
3. Spin-offs of industrial groups
Keywords such as "Lean management", "Focus on core competencies" and "Shareholder value" are
fashionable.
Irrespective of such fashion trends, the Portuguese economy has understood that only those
companies will survive in the global economy in the long run which position themselves as the leader
in a specific market segment. This is the reason why more and more industrial groups and
corporations sell subsidiaries or company divisions to be able to concentrate on the core business
fields.
We support small and medium-sized companies wishing to sell business segments, big Portugal
corporations which intend to sell national or international subsidiaries and assist also foreign groups of
companies which would like to dispose of their Portuguese subsidiaries for whatever reason.
5. THE MERCAL METHODOLOGY FOR M&A
4. Exit strategies for banks
It is well known that Portuguese small and medium-sized companies have got a high debt ratio.
These problems become dangerous when economic problems arise and the financing banks
become their de facto owners.
The way out of such a scenario is often that the company co-operates with a bigger strategic
partner. In these situations the banks and the shareholders contact us in order to organize a selected
and determined search for national and international partners on a short-term basis. The existing
equity and the debt capital positions are secured and the existence of the company as well as the
jobs can be guaranteed.
5. Exit strategies for financial investors
The number of the financial investors and the amount they invest as well as the number of
institutional investors in Portugal has multiplied during the last years. With an average investment
term of between five and seven years, an increasing number of exits by these investors will be seen
in the years to come.
5. THE MERCAL METHODOLOGY FOR M&A
ACQUISITIONS
The acquisition of a company is always a step towards the realization of a business or personal
objective, such as:
to strengthen the market position by external growth both at home or abroad
to utilize all existing capacities
to expand into neighboring product/market segments
to better diversify the risks
to secure new technologies, and
to become an entrepreneur as an MBO/MBI candidate
Depending on the criteria defined for the acquisition and the time scheduled for making the
acquisition, the party interested in buying a company should determine its acquisition strategy.
5. THE MERCAL METHODOLOGY FOR M&A
1. Procedure of an acquisition assignment
It is necessary to develop a conclusive acquisition strategy in order to successfully execute a company
acquisition. When being commissioned with an acquisition, we offer the following services to our clients and
support them in implementing their objectives:
Definition of the acquisition criteria and analysis of the objectives
A complete selection of the candidates on the basis of a grid of criteria
Establishing confidential and personal contacts
Analysis of candidates
Assessment of an appropriate purchasing price
The development of negotiation strategies and the conduct of negotiations
Preparation of contracts involving external legal advisers
The complete assistance in a strategic acquisition we provide ranges from the market research and the
definition of targets right up to conducting the negotiations, so that the success of a later integration is ensured.
This is the only way to actually benefit from the intended synergy effects.
5. THE MERCAL METHODOLOGY FOR M&A
2. Acquirers' Database
During the decades of our successful M&A consultancy we have internally developed a complex
database with extensive information on the acquisition criteria of different groups of potential
acquirers. In this database we systematically compile data on private investors, financial and
institutional investors, industrial acquirers, and MBI candidates, both nationally and internationally.
Today, our database comprises more than 5,000 entries. It is updated on a regular basis, which enables
us to quickly assess the current situation for acquisitions in different industries and to contact potential
acquirers showing a sustained interest at short notice.
5. THE MERCAL METHODOLOGY FOR M&A
COMPANY EVALUATION
As part of our M&A assignment, we draw up valuation studies for companies and investments. We also
prepare studies for an appropriate valuation of companies of the relevant stock exchange tier for the
clients of our IPO consultancy department. We master the well-known scientific valuation methods and
apply them in practice by using our wealth of experience we have gained in these areas over many
years.
We determine practice-related and feasible business values by using the following procedures,
depending on the task assigned:
Capitalized earnings method
Discounted cash flow method
Comparative value method
Net assets valuation
Determination of the liquidation value
5. THE MERCAL METHODOLOGY FOR M&A
COMPANY RESTRUCTURING
Turnaround, is to recover insolvent or potentially insolvent companies, bankruptcy, recovering them, achieving
financial and operational stability. This is possible maximizing the creditors interests and simultaneously, those of
the employees, managers administrators and owners.
Mercal Consulting Group develops a Financial Restructuring Plan and supports the implementation at an
operational level for the sustainment of the viability of the company and its businesses at the most different
levels.
Company Restructuring normally involves:
Analysis of the Company situation;
Developing the Business and Financial Plan
Reorganization, restructuring or implementation of the financial plan.
Approaching company restructuring:
The advantages of hiring us for company restructuring are:
Fastness when diagnosing the company;
Fast intervention in order to maintain the feasibility of the company;
Interim Management;
Financial restructuring;
Development and Implementation of a broad set of solutions for the crisis generation problems.
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6. M&A PROJECTS
Resume of Assignments
Evaluations of Companies Assignments covering all industries and acting as Financial Advisor with more
than 106 evaluations, some of them included support for selling and
acquisition projects, succession plans and finance restructuring.
Selling Companies
Financial Advisor in 24 Selling Assignments covering companies in Portugal
(21), Mozambique (2) and Angola (1).
Acquisitions
Financial Advisor in 19 Acquisition operations covering companies in Portugal
(7), Mozambique (4), Angola (5), and Guinea Bissau (3)
Succession Plans
Financial Advisor in 4 assignments of Portuguese Family Groups
Finantial Reestruction
Financial Advisor in Restructuring Plans involving private equity, venture
capital and loans (46 Assignments)