CONSULTING


CB Partners advises and supports companies in the management and optimization of their performances, as well as in M&A processes of mergers and acquisitions, at an international level.

With a history of more than 50 operations in M&A in 20 years, in 7 countries, including transfer of assets, takeovers, LBO operations, creation of companies, listing on the stock market, raising funds in innovative forms (OBSAR, Etc.), CB Partners proposes the following approach in all or part according to the needs of the client companies:

1- Development of the M&A strategy
2- Identification and selection of potential M&A targets
3- Identifying key factors and getting in touch with targets
4- Structuring of the transaction
5- The Diligence Process
6- Risks assessment
7- Negotiation of the transaction
8- Discussion of the financial structure
9- Closing of the transaction
10- Implementation of the integration


1 M&A strategy development
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The first consideration in the development of mergers and acquisitions strategy is whether an acquisition or even a merger is an appropriate strategy to grow.
It is necessary to establish an M&A strategy compatible with the overall mission organization's, the goals and needs, and to analyze the business combinations.
An M&A strategy should clearly define the financial goals, the acquisition criteria and the budget.
Acquisition criteria should specify the goals of the acquisition which can be:
a) Diversification of products, services, and business risk.
b) Expansion of market share by acquiring competitors.
c) Vertical integration by acquiring suppliers and distributors.
d) The acquisition budget must specify the qualifications, talents needed and operations plan

The M&A strategy should also specify the financial and intermediary advisors required for M&A operations and their follow-up.


2 Identification and selection of potential M&A targets


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Identification and selection of acquisition targets should be based on established acquisition criteria. The first step is to look for targets and choose the industries and areas that the acquirer wishes to consider.


3 Identifying key factors and getting in touch with targets

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Once a group of potential candidates has been carefully selected, they must be contacted and presented with a range of prices in order to create price competition and maximize shareholder value. Potential candidates are selected by identification and through a number of key criteria and factors specific to the acquirer such as industry, location, marketing, products, management, size, potential income, and the results of the operation.
The acquirer must ensure that these candidates are genuinely interested in engaging in the merger or in the discussion about the sale.

This process should help the purchaser in selecting the appropriate target that meets the established criteria for the acquisition and ensuring that its initial assessment is conform to the previously defined criteria.


4 Structuring of the transaction

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Structuring of the acquisition operation begins with planning the initial meeting between the acquirer and the target. The key issues discussed ashould negotiate the strategy, the valuation of the acquisition transaction, and the financing options. Determining the value of the target is probably one of the most difficult aspects of the M & A transaction primarily because each case is unique, and it is difficult to place the value of the target in a single figure.
The best way to structure and specify the limits of a transaction is to reach an agreement that is appropriate and acceptable to both the target and the acquirer.


5 The Diligence Process
 5audit-due-diligence The due diligence process consists of financial, operational, and legal diligence.
Due diligence consists of an extended checklist, it must be prepared by the acquirer and can be programmed at different stages of the acquisition process.
The first goals of this process are:
1) Review all important information.
2) Assess key factors and potential areas of business including financial, operational, legal, and contractual activities.
3) Assess the potential risks of the M & A transaction
4) Decide the purchase price and financing methods of the transaction.


6 Risk assessments

 6-risks A number of benefits can be derived from M & A and include:
1) The potential reduction in costs resulting from the adoption of a more economical and efficient technology (synergy).
2) Expansion of the territory by creating a cheaper market for products or services.
3) Combine management positions and eliminate inefficient management.
4) Economies of scale.
5) Strengthening the financial situation.
6) Stabilization of cyclical or seasonal cases.
 However, growth through business combinations is a decision that includes risks that can cause the failure of M & A transactions.

Factors that can cause significant operational risks include:
. Insufficient knowledge of the business of the target and its industry
. The lack or inadequacy of a sound post-acquisition integration plan
. Inexperienced executive members
. Errors in the proper execution of the integration plan
. Unrealistic expectations of the target's outlook.
· Overestimating the market potential of target products.
· Unsatisfactory and inefficient analysis of the financial position and results of the target's operations.
· Errors in the forecast forecasts of the target.
· Underestimating the impact of competition.
· Overestimation of the potential benefits of integration (eg synergies, economies, economies of scale).
· Errors Financing the target with Too Many Debts
· Ignore the effect of changes in the main variables (eg competition, economy, sales, products, interest rates, income, operating margin) on the proposed financial structure.
· Inability to generate sufficient cash flows to finance not only operations following integration but to cover debts.


7 The negotiation of the transaction
 7-negociation   Negotiations play a crucial role throughout the M & A process,Trading in M ​​& A transactions consists of two phases:
1) preparation of letter of intent
2) carry out the acquisition agreement.
The following factors should be incorporated into the financial structure: the expected purchase price, the maximum amount of equity required, the projected amount of cash flow required and the method of financing such cash flows (eg debt, Equity).


8 Discussion of the financial structure

 8-structure-financiere The financial structure depends on the size of the transaction, the nature and quality of the target and the organization of the acquirer.
The following factors should be incorporated into the financial structure:
The following factors should be incorporated into the financial structure: the expected purchase price, the maximum amount of equity required, the projected amount of cash flow required and the method of financing such cash flows (eg debt, Equity).

9 LA CLÔTURE DE LA TRANSACTION
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Several procedures must be executed to professionally and legally close a transaction.
· Complete the due diligence process and consider legal documents of the utmost importance and verify if they comply with the terms of the purchase agreement, and other applicable laws and regulations.
. Receipt of funding commitments.
. Execution of the purchase agreement.
. Receipt of audited financial statements.
· Comply with applicable laws and regulations.
· Establishment of key employment agreements.
· Resolution of the tax accounting problems of the transaction.
· Maintain a minimum of net wealth necessary.
. Obtain the consent of third parties on the transfer of material agreements, authorizations, or rights.


10 Implementing Integration

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Implementation of integration involves:
1) Design and implement changes necessary to integrate the new acquisition into existing business.
2) Take appropriate actions such as size reduction, eliminate duplication of fees.
3) Development of new cash management systems.
4) Consolidation of accounts.
5) Management of information systems.
6) Implementation of a new employee transition program.