The valuation process over time has gained increasing importance within the day-to-day operations of those in business. The definition of value remains the main objective in extraordinary corporate finance transactions or corporate reorganization projects. As of today, valuations are considered an assessment process to support the strategic choices of Shareholders.
Merger & Acquisition (M&A) transactions are now the most frequently adopted growth mode for companies to pursue their strategic objectives.
Through M&A operations, the corporate structure of two or more companies is changed with the aim, for example, of creating new synergies and economies of scale, growing by external lines, managing the transfer of ownership, generational change or transition from family to managerial ownership, relaunching the business, improving management, increasing competitiveness in the target market, and diversifying its business. The main peculiarity is the speed that distinguishes these operations from growth paths by internal lines, allowing companies to enter new markets or access new technologies, innovations and skills quickly and flexibly.
For these reasons, M&A transactions have over time been increasingly used by companies in their strategies aimed at gaining a competitive advantage.
Within an extraordinary transaction, in order to elide the information asymmetry between buyer and seller, the seller or buyer engages an independent third party to conduct “due diligence” checks and controls. The main objectives of due diligence are to: confirm the strategic rationale of the transaction; confirm the preliminary assessment included in preliminary documents (e.g., letters of intent, term sheet); and identify any risk factors, critical issues and opportunities. Due diligence normally involves checks and balances on various areas: financial/accounting, commercial, tax, legal, HR/payroll, IT, reputational, and ESG.
What can SGB do?
With a specialized and dedicated Team, it can assist the buyer or seller in the appropriate and necessary verifications in order to proceed with the prospective transactions avoiding later surprises.
M&A transactions require affinity to the entrepreneur at various stages of negotiation. In the preliminary stage, where existing conditions need to be verified and the path to be followed defined with the counterparty, generally sealed by the signing of a letter of intent or term sheet. In the executive phase, where it is necessary to define with the counterparty the details of the agreements and covenants, sealed by the signing of the Final Agreements and/or Shareholders’ Agreements (signing). In the final phase, where it is necessary to effectively execute the signed agreements (closing). In the post-closing phase, where there are generally so-called “adjustments” with reference to the date of execution of the underlying agreements.
What can SGB do?
With a specialized Team and supported by the legal area can assist the buyer or seller step by step in the steps of the transaction.
SGB is able to support clients in creating value through M&A processes by developing a suitable and compliant pre-deal strategy, identifying possible difficulties, supporting in obtaining the best structure for the deal, and identifying the key fine aspects of the negotiation, resulting in conveying efficiency in transactions.
In addition, the SGB team is also able to support its clients in the post-deal stages, to implement synergies and improvements, but also to manage integration processes, divestment of non-strategic assets.