M&A Integrationmanagement

Pre due dilligence

Due dilligence before concluding the contract

Due dilligence after concluding the contract

Prelliminary Phase-> Preparation Phase-> contact phase-> Negotiation and contract phase-> Post-phase integration

1. Analysis of the Initial Situation

2. Data Processing and Documentation of the Sale Object

3. Buyer Identification

4. Determination of Ongoing Procedure

Negotiation phase:
− Further due diligence
− Contract negotiations
− Signing
− Closing

Closing phase

preparation phase
 

Blind profile/teaser: 

−  The basis of each contact or negotiation is a description of the company for sale. 

−  Conflicts of interest between buyer and seller – the buyerwould like to be fully 

informed; the seller would like to disclose details and sensitive data late in the day. 

−  Provision of comprehensive information for the buyer. 

−  Blind profile (teaser) contains key cornerstones of the company in an anonymous form. 

−  Teaser as the basis of the interested party for a discretionary declaration so that he/she 

receives in-depth information. 

last point in negotiation and contract phase:

- Price, basis of price calculation, strategic intentions of the buyer concerning the future of the company, statements about the future of management, due diligence extent and procedure, time frame, cornerstones of purchase contract, possible exclusivity of corporate rights, confidentiality clauses, etc. 
- Legally binding 

In a letter of intent, the cornerstones of the planned transaction are defined from the outset. It addresses both organizational issues (schedule, participants, exclusivity) and the core issues of the subsequent purchase contract, as far as these can be determined (purchase price and purchase price structure, transaction structure). 

strategic reasons:
- no candidate for company succession
- to small in a consolidating market
- outsourcing of funcitions/concentrating on core competences
High innovation and investment pressure

financial resons:
- restructuring
- unfavorable financing and liquidity structure
- private equity-> exit
- capital requirements

Strategic reasons:
- procurement of value creation stages
- diversification
- expansion of product and service range
- aquisition of new markets
- purchase of market share
- tilization of proportion or synergies
 

finacial reasons:
- capital investment
- private equity-> entry

In the due diligence review, the prospective buyer wants to scrutinize the acquisition company as closely as possible.
The usual areas covered by due diligence are: operational or commercial, legal, tax, financial, and possibly environmental. 

-  Shortening the process run-time through optimized task distribution and interface control 
-  Avoidance of strategic, tax, legal, and financial disadvantages 
-  Increasing market transparency and time to market 
-  Objectification and critical review of internal ideas and perspectives 
-  Flexible adjustment of personnel capacity bottlenecks 
-  To be a “lightning rod" when represented by consultants in critical phases of negotiation

-  Capacity issues 
-  Procedural know-how and neutrality 
-  Specialist skills 
-  Sparring partner 
-  Neutral and discrete contact 
-  Role allocation in negotiations 
-  Responsibility 

−  Experience in handling similar transactions in this or a comparable sector 
−  Opportunity to employ a dedicated team to handle the mandate coupled with continuity of participating persons 
−  Personal contacts or access to contacts via an individual, professional network 
−  Independence and absence of conflicts of interest or regulatory restrictions 
−  Experience in managing M&A processes in a customized way rather than "by the book" 
−  Good personal interaction between client and commissary 

strategy devekopment-> screening of candidates-> negotiations-> closing the deal-> post-merger integration

1. institutionalize integration office responsility
2. implement performance transformation
3. exploit growth dynamics
4. take care of talents
5. introduce integration monitoring

• corporate history and essential stages of development
• description and general development of markets and competitors
• description of products and state of R&D
• presentation of the production process, value added stages, suppliers, and subcontractors
• presentation of marketing and sales processes
• presentation of available resources (human resources, real estate, plant machinery)
• management and process organization
• historical development of income statements, balance sheets, and financing situation
• financial plan for the next three to five years

advantages:
individual assets do not have to be transferred. 

disadvantages:
a share deal requires increased attention to the due diligence process because so-called "skeletons in the closet" will also be acquired. "Cherry picking" the choicest parts is not possible without further structuring. 

both business in the same industry but on different production level.

both companies on the same production level but different inustries