We prepare you for a successful M&A journey

As a rule, buyers want to be able to rely on a well-established and strong management team even after a transaction. In the case of founder-managed companies in particular, a great deal of knowledge often lies with the managing partner, which represents a risk for the buyer. Adapting the management structure to the sales process and the strategic development of a suitable successor and – if necessary – a strong, second management level creates trust and has a positive effect on the valuation.

Are all contract documents complete and legally valid? In practically every M&A project, we experience shortcomings in this area that need to be addressed quickly and can lead to delays. The so-called “title chain” is of particular importance here: The complete and legally flawless traceability of all shareholder changes, share transfers etc. since the company was founded. Particularly in the case of older companies or if there has been a change in the company’s legal form, the documents required for a sale are often missing. A potential buyer also looks very closely at contracts with customers: is the customer relationship properly documented, are there signatures on all contracts, are all addenda filed accordingly, etc. If deficits emerge here during due diligence, these issues often cannot be resolved quickly. Typically, one is reluctant to approach clients shortly before a company sale and urge them to resolve such issues quickly. With adequate lead time, this can be better planned and implemented. Employee contracts also deserve attention and the extent to which they properly reflect applicable law, especially in the case of freelancers, employees abroad and with regard to regulations on inventors’ rights.

Can you provide up-to-date and detailed analyses of the composition and development of turnover? Potential buyers of your company will always want to understand how turnover is distributed among customers, products and projects, how this has developed in the past and how profitable individual activities of your company are. Of course, such controlling systems depend on the status and size of the company in question and must be introduced with a sense of proportion. However, improvements in this area are hardly possible in the short term. If the required information is not available in the M&A process, the data must be compiled manually, which can lead to a great deal of additional work and delays. Corporate buyers want answers to their questions as quickly as possible. If the answers are delayed or not provided at all, the company being sold loses trust.

For potential buyers, the annual financial statements are of central importance in the initial assessment and valuation of their company. Do you have consolidated financial statements for several group companies? Do the financial figures include shareholder-related items or special effects that may distort the earnings power presented and should be normalized? We make sure that your financial figures reflect a correct, but also the best possible picture of your company that can withstand intensive negotiations.

Today, your corporate communication is primarily aimed at potential customers. With the sales process, you have another target group: potential company buyers. In high-tech industries in particular, the corporate image is often neglected and geared towards the information needs of a technical clientele. The website, PR and/or LinkedIn presence are often in need of improvement. The management of a potential buyer informs itself on a different level. With a little lead time, your company’s external image can incorporate these needs and thus make the whole M&A process easier. It is important to present your company in an understandable and positive way for both technicians and businesspeople. Particularly in the case of strategic buyers, the decision on an acquisition is made in committees made up of managers who may not understand the subject area or technology of your company in detail. These information requirements of these people need to be considered.

Are there any subsidiaries that are no longer operational? Does the company contain assets or other items that should not be part of the transaction? Is the company structure potential obstacle to an efficient sale or does it entail tax disadvantages for the seller? These issues do not necessarily have to be relevant for your company, but they can lead to enormous delays and even rejections from interested parties when selling a company. We therefore take a close look at these topics.

How is your company’s working capital managed? In this area, improvements are often possible with little effort and lead directly to an increase in sales proceeds in the event of a sale. However, the measures must be implemented in good time before the M&A process, as a buyer will not accept short-term optimizations. The management of receivables and liabilities should therefore be examined in detail at least six months before the start of an M&A process in order to make possible improvements. Without preparation, money is unnecessarily “wasted” in this area.