Newsletter – May 2008
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1. Business plan review and support to negotiations:
The situation:
The coming together of a team having developed an innovate concept in the field of public transportation and of an independent investor active in a series of diversified areas. The two parties have decided to work together towards raising the financing required to complete the development stage and initiate comprehensive commercial efforts.
At stake:
The promotion of a concept that requires venture capital type of investments is new to both parties. Key to attracting potential investors at this stage of the development is the quality, depth and transparency of the information provided to potential investors as well as the identification of the types of investors most likely to react positively to the investment opportunity.
Our contribution:
Taking on the standpoint of the potential investor, we reviewed all the documentation provided by the project iniators and took part in “rehearsal” investors’ presentations. Strengths and weaknesses of the project – in all its dimensions – were thus highlighted and could be addressed before actual contact with investors.
2. Growth management support:
The situation:
A recently founded company active in the field of asset management, with a high and sustained growth rate since inception, and that needs to ensure that all mechanisms are in place to guarantee full command over operations. This preoccupation is reinforced by the recent laws requiring external auditors to specifically look into and assess their clients’ internal control systems.
At stake:
In a context where rapid growth put significant pressure on all employees to cope with everyday operations, the key is to define and implement an approach that will allow the definition and the documentation of processes and controls to take place while making the most of everybody’s limited availability.
Our contribution:
Essential to the success of that type of engagement is the use of material pre-existing within the company and its inclusion in a flexible development process. We made use of our long experience in setting up internal control systems to provide immediate visibility on the “as is” situation and define the optimal path to a comprehensive internal control system.
Our expertise in capturing and documenting operational processes allowed us to propose a structure which, while providing complete transparency on processes and controls, limits to the minimum the total volume of documents required.
3. Support to business transfer:
The situation:
An entrepreneur which heads an international, growing and profitable company, and which plays a pivotal role both in business development terms and regarding core technical know-how. A potential buyer that wants to acquire both the company’s dynamism and its owner’s business acumen to enhance the performance of his own group.
At stake:
Provide the entrepreneur – our client – with professional and transparent valuation estimates for his company, so as to allow him to enter negotiations on a sure footing. And just as importantly, provide visibility on all the dimensions of the negotiations, in particular in this case, issues related to the integration of the entrepreneur and his company into a bigger and more diversified group.
Our contribution:
By defining a range of valuation estimates based on the main recognized methods, we provided our client with a strong factual basis, thus consolidating his negotiation stance. In addition, our know-how in terms of pre- and post- merger and acquisition issues allowed us to highlight important subject matters that need to be put on the table during negotiations, thus avoiding subsequent problems that can be very disruptive down the line.
