Merger and Acquisition Services - The Buy Process

1. Understand the Strategy

Prior to signing an Engagement Letter to represent a Buyer, we first meet with the potential Client (one or more times), communicate via voice and email and perform our own research, all to consider the Client's business, goals and expectations for a purchase. It is vital we understand the "context" or the interrelated conditions that are motivating the buyer and as a result we can understand what the buyer wants to achieve and how it fits within their overall business strategy.

2. Clear and Agreed Upon Goals

Once we have a thorough understanding of the strategic context, we work with the Client to outline objectives for the purchase. These are defined in terms of potential targets, desired targets’ attributes, valuation methods and timeframes.

3. Engage the Project

Having completed the first two steps of understanding the context and the agreed upon goals of the purchase, we then proceed to formally entering into an Engagement Letter with the Buyer.

4. Identify Acquisition Targets

Once we are engaged, we immediately develop a thorough long-list of potential acquisition targets. We build this list from our own database and research as well as from information supplied by the Client. This list can include standalone companies or divisions/business units of larger corporations.

5. Narrow to a "Short List"

Once the list of potential targets is developed, we then begin the process of narrowing this down to a workable short-list of viable candidates. We do this by contacting discreetly each potential target to ascertain the "potential to buy" of the company, or division. During this process we further screen the target using the agreed upon goals and desired attributes set by the Buyer at the beginning of the engagement.

The short-list will include only those who have been qualified through the screening process and who have indicated a true interest in being acquired. We usually reveal the identity of our Client during this process as this is key to confirming true interest on the part of the target being acquired.

6. Negotiate best Economic Return

Working with the Short-list of potential buyer, we negotiate on the Buyer's behalf the best economic return for their investment. The best economic return is not only a function of price, but also of payment terms (cash, stock, seller financed debt, earnout or combinations of these payment methods) but also of other terms such as assets and liabilities assumed (or not assumed), timeframe of completion, ability to integrate into Buyer's operation and business. Many of these criteria can be extremely important to the true economic return the Buyer will realise and thus will ultimately be the determinant of a successful transaction. The best price does not always mean the best economic return for the investor (Buyer). The overriding objective of the process is to complete a transaction that fulfils the key goals of the Buyer with the best economic return for their investment.

7. Integration Planning (an optional service)

In addition to negotiating the transaction with and on behalf of the Buyer, we can also assist the Buyer with WTA’s Integration Planning Process.

Successful integration of an acquisition is perhaps second in importance to the buying process and choice of the correct acquisition target. A perfectly executed acquisition process will still not result in a successful acquisition unless there is a correspondingly successful integration of the target into the operations of the Buyer.

Due to our experience as both successful IT sector operating managers and as M&A advisors, we understand the vital importance of integration planning and execution. One of the valuable services we can offer to the Buyer (and indirectly to the Seller as well) is advise in the Integration Planning process. Ultimately, it's the responsibility of the Buyer to develop a proper integration plan to execute it. However, we work with our clients to ensure that proper integration planning is addressed BEFORE the transaction is completed and we offer the benefit of our experience and advice. This optional service can be provided at an additional cost to the Buyer.

8. Complete Contract

Once the price and terms are completed, typically using a detailed Term Sheet or Heads of Agreement, and the probability of close is confirmed, the Completion of the detailed purchase contract and the closing (transfer of funds and title) transaction is the final step in the process. This can be a time consuming and extremely detailed step and one in which we have extensive experience. This step in the process is in many ways the most important and delicate as it is truly the final step and often the hardest to navigate with lawyers, accountants, advisers and sometimes other participants involved.

We are very experienced in managing this process and in dealing allying any concerns that arise during this critical time.

9. Post Transaction Review

Upon completion of the Sale Process we conduct a Post Transaction Review with our client to solicit their feedback on how we performed the project including what went well and what could have gone better.