Whether as part of a targeted buy-and-build strategy, to expand existing business areas or to exploit synergies and economies of scale – the acquisition of a company can offer a variety of strategic advantages. We conduct extensive research to identify suitable target companies for you and approach them confidentially. We support you in the selection of the best targets, in the valuation and during the review and negotiation process.
When acquiring a company, the first step is to define the profile of the ideal target company. In the next step, potential targets are identified, analyzed and discreetly approached following a joint discussion. During the approach, the target company’s willingness to sell and its strategic suitability are established. If there is mutual interest, further information and documents are exchanged following the signing of a non-disclosure agreement. After more intensive discussions and negotiations, the cornerstones of the transaction is summarized in a term sheet. The risk assessment (due diligence) of the target company then takes place. If no unforeseen risks are identified, the final contract is negotiated.
In the case of company acquisitions, a distinction is essentially made between complete takeovers and majority or minority takeovers, as well as between share deals and asset deals. When taking over an ongoing and healthy business, buyer and seller will typically seek to implement a share deal. In this case, the buyer takes over all shares in the company to be sold. This has the advantage that current contracts, e.g. with customers and employees, do not have to be changed. In an asset deal, the buyer will not acquire any shares in the company, but all or selected assets, rights and contracts are transferred to him. This reduces the risk for the buyer of taking on unidentifiable liabilities or legacy burdens. However, contracts with third parties must be adapted accordingly.
Differences in the assessment of the status and potential of a business and the resulting differences in purchase price expectations are among the most common reasons for the failure of a transaction. The causes can be different perspectives and information asymmetries between buyer and seller. As Quantum Partners, we moderate the discussion on such issues and will identify possible solutions and compromises that take into account the respective interests of the parties.
At an advanced stage of the transaction process, usually after the letter of intent (LOI) has been signed, the buyer will conduct a due diligence. In this risk analysis, the buyer examines the target company in detail and is supported by appropriate experts. The scope and length of the due diligence typically depends on the size and complexity of the target company. The main areas of investigation include: Commercial, Financial, Legal, Tax and Tech Due Diligence. If risks (so-called red flags) are identified at the target company during the due diligence process, this can have an impact on the company valuation and the further course of negotiations. In such cases, an M&A advisor should point out possible solutions for the changed situation.
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