Opportunistic & Sudden Mergers & Acquisitions

Importance of financial circumstances during M&A:

The company benefits that does the merger and acquisition activity in good times. The company suffers huge financial losses that does merger and acquisition activity in haste and tough financial times. Three types of circumstances of a company. They decide the bargaining power of the company in the M&A transaction.

Following  are the three types of M&A based on the financial circumstances of a company

  1. Growing business needing equity for growth
  2. Distressed business needing equity for turnaround
  3.  Introvert business suddenly looking at acquisition opportunities or becoming a target

Equity funding for or by opportunistic businesses:

The companies that are neither aspiring growth not having any kind of financial problem also engage in merger and acquisition activities depending upon the quality of the opportunity available & their mood.

Following are the varieties of managements that suddenly may take interest in merger and acquisition activity:

Not able to take M&A decisions because there is no experience
Don’t know weather this is the right time for M&A
Waiting to fail on the financial front but the management currently doesn’t know that
Loosing good opportunities frequently and falling behind competition
Companies with no timely succession planning and likely to be sold at dirt cheap value after value destruction
Companies with no timely succession planning and likely to be liquidated after retirement of the business man
Companies without horizontal or vertical integration and suffering from supply chain shocks.
Companies surviving on luck without any risk management mechanism
Surviving on relationships with political circles or with big companies

Companies can be in any of the circumstances mentioned above. Apohan carries out professional, end-to-end, customized consultancy services for above classification of circumstances of the company to achieve the objectives of the client business. Apohan carries out all these equity transactions, right from the problem identification phase, to the closure of deal with perfection.

Apohan’s services in acquisition consulting

Following are the Apohan’s services for M&A of Indian SME businesses:

Understanding business client objectives
Preparation of client profile
Industry scanning for strategic investor company for best fit

Industry scanning for financial investor company

Secondary market research of the sector and industry
Study of applicable local legal and regulatory framework for mergers
Inception report with M&A strategy for M&A transaction to the business management
Analysis of broad M&A options (contractual, equity, local, foreign, etc)
Analysis of mode of subscription to equity (private placement, etc)
Analysis of form of equity (common, preference, convertible, etc)
Orientation of client management for the M&A process
Preparation of the desired target investor profile (ticket size, fund types, etc)
Anonymous advertising in print media, online media, social media
Circulation of opportunity among investor forums, business forums, online deal platforms
Preparation of the a list target investors
Ice-breaking discussions with target companies
Selection of the target investor

Preparation of mutual NDA between principles

Structuring of the merger
Negotiation for sharing of control

Role of the previous directors

Financial performance targets in case of turnaround
Formulation of a strategy for a new project (size, location, capacity, etc)
Preparation of project information memorandum
Preparation of project profile
Preparation of a Business plan
Preparation of time Schedule of investment requirement
Negotiation on mode of issue of equity
Finalization of type of equity
Preparation of nature of amendments in MOA & AOA
Preparation of of drafts of board resolutions for internal approvals
Preparation of the financial model
Preparation of valuation for various levels of Equity stakes in the company
Preparation of key strategic terms of merger agreement
Selection of accounting, taxation and secretarial experts
Valuation for the purpose of taxation through certified valuers
Identification of due diligence agencies
Due diligence (corporate, financial, key contracts, marketing, procurement, key assets, real estate, manufacturing facility, permits & certifications, technology, operations, brand, intellectual property, compliance, associate companies, forensic, human resources, information technology, administration, etc.)
Preparation of due diligence report
Preparation of risk profile of the envisaged merged entity

Compilation of data for specific query
Preparation of term sheet
Preparation of draft business transfer agreement
Assistance in board meeting and General Meeting as special expert invitees
Preparation of disclosure schedule
Assistance in negotiation of business transfer agreement
Assistance in execution of the investment document
Assistance in understanding the investment payment process

Assistance in disbursement of payment

Resolution of deadlocks
Key inputs on integration process

Hand holding support for management of joint venture after the deal