M&A Master Class Series - Part 4 Recap

Dec 9, 2011 - by Joel Lessem

Today we enjoyed our fourth collaborative Master Class with Andrew J. Sherman, author and Partner at Jones Day.  He led us through his best practices to ensure success in post-close integration with a Buy-Side perspective of M&A.

Andrew spoke to the challenges in post-close integration. Citing at KPMG survey, Sherman agreed that cultural and people issues present the biggest challenge during the post deal period. He also referenced specific data points related to post-deal integration, citing a Deloitte survey Sherman highlighted that although the desired outcome of integration may be to rapidly capture cost & revenue, synergies were not achieved in 70% of cases.

The news wasn't all bad though, Andrew provided tips, tricks and checklists for retaining key employees, overcoming cultural issues, establishing a transition team and more.

M&A Master Class Series - Part 3 Recap

Nov 18, 2011 - by Joel Lessem

Today, we once again enjoyed our third collaborative Master Class with Andrew J. Sherman, author and Partner at Jones Day.  He led us through his due diligence best practices and pitfalls with a Buy-Side perspective of M&A.

Andrew likened the due diligence process in M&A to dating, "Some people like to disclose everything on a first date, most of us reveal information about ourselves on a phased basis as we get to know the other party. The due diligence process in M&A is more akin to that, as long as you're not witholding information that would change the nature of the transaction." Transparency and openness are keys to conducting successful due diligence. Sherman added that, "Those who are successful in due diligence leave their ego at the door."

M&A Master Class Series - Part 2 Recap

Oct 20, 2011 - by Joel Lessem

Today, we once again enjoyed an enthusiastic and collaborative session with Andrew J. Sherman, author and Partner at Jones Day.  He took us through the Buy-Side perspective of M&A and focused on how to qualify your seller and uncover hidden value.

Building on his weather forecast in Part 1 of the series, Andrew alluded to the clouds parting for M&A in 2012.  Using a bullhorn he gave the call to action to Buyers, “Attention K-mart shoppers – deals to be had!”  Companies are sitting on $2.5 trillion and this value will be flowing back into the markets. Buyers need to be prepared to capitalize on the buyer’s market that currently exists but not to rush into acquisitions.  Vigilant due diligence is crucial.

4 Tips on Closing a Buyer

Oct 7, 2011 - by Joel Lessem

I have spoken to many entrepreneurs and intermediaries.  Some of my peers in my CEO circle who are approached by a potential acquirer, are at times more focused on “what’s in it for me” versus their buyer’s mindset.  

Bottom line is first you need to qualify your buyer.  Once you’re satisfied you need to make sure you’re easy to deal with.  This should not be a tug of war.  It’s a courtship ending in a marriage! 

M&A Master Class Series - Part 1 Recap

Sep 29, 2011 - by Joel Lessem

Recently I participated in the M&A Master Class webinar alongside Andrew J. Sherman, author and Partner at Jones Day.  What an incredible opportunity to listen to a leading authority on M&A, up close and personal. This session took listeners through not only his views on the current state of the market but also key steps to prepare for selling a company.  The slides to his presentation are posted on the Firmex website, but I thought I would re-iterate his views on the current state of the market, which he took us through in our conversation.

How to Lose a Billion Dollars

Aug 4, 2011 - by Joel Lessem

One of my favourite books is Billion Dollar Lessons by Paul Carroll and Chunka Mui.  The book is distilled from researching 2,500 significant business failures.  The authors describe: 

The extent of the failures was stunning. Since 1981, 423 U.S. companies with assets of more than $500 million filed for bankruptcy. Their combined assets at the time of their bankruptcy filings totaled more than $1.5 trillion....Their combined annual revenue was almost $830 billion.

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M&A due diligence: when to negotiate warranties against potential blind spots

Jul 7, 2011 - by István Préda

Cat and mouse warranties
The extent and scope of warranties is one of the trickiest negotiation areas in selling or buying a private company. The buyer wants to make sure that the financial statements were true and fair and it had received all relevant information for his investment decision on closing, while the seller is afraid warranties will allow the buyer to claw back part of the purchase price after the deal. The most important areas to seek warranties are: the valuation of assets, off balance sheet items, related party transactions, pending litigations and potential tax liabilities.

Tips on legal due diligence for debt free cash free valuations

Jun 30, 2011 - by András Lendvai

Enterprise Value and Contractual Purchase Price – Debt Free Cash Free Valuation

The valuation of the target company is a substantial element of any given acquisition transaction. This article showcases the DFCF (debt free cash free) standard for enterprise valuation and the issues raised in the context of transaction contracts. The DFCF valuation is a calculation that ignores how the target company’s business is funded. The DFCF valuation shows the value of the company without accounting for the net cash or net debt held by the company, either on average during the year, or at closing.

How energy and mining firms are using data rooms to drive growth

Jun 15, 2011 - by Aaron Booth

With long term demand for energy and base metals increasing worldwide, energy and mining companies are looking for innovative ways to grow at a time of economic uncertainty.  From M&A transactions to attracting new capital, many firms are using data rooms to coordinate discussions with potential partners and investors across the world.

To better manage M&A deals and attract financing in innovative ways, leading energy and mining firms are using data rooms to share confidential documents like contract drafts, engineering drawings, and site photos.  A properly configured data room plays a key role in coordinating secure communication across internal and external stakeholders such as board members, financers, bidders, accountants, and lawyers. 

We asked our energy and mining clients to tell us about emerging trends in their industry, and how they are using virtual data rooms beyond the more traditional uses of M&A deals and corporate financing applications:

State of the M&A Markets – First Quarter 2011

May 24, 2011 - by George Steinbarger

The first quarter of 2011 started off as well as most could have expected after the surge in M&A activity to close out 2010. The Q4 momentum has carried over into the first part of the year as the economy continues to recover, the debt and equity markets improve, and a general advance in buyer confidence gains strength. While several challenges continue to exist, deal makers are emboldened by the recent trend of activity occurring and remain optimistic that the economy and M&A markets will continue to improve during the coming year.