Fusões e Aquisições EN

Mergers and acquisitions

By conducting a Mergers and Acquisitions Advisory (M&A Advisory) with Setape, you are ensuring complete advisory for the success of a company’s purchase or sale transaction.

What is an M&A Advisory – Mergers and Acquisitions?

M&A stands for mergers and acquisitions. It is the set of activities related to the purchase or sale of companies.

Companies are complex assets and the transactions in which they are involved are also complex. From the point of view of both the buyer and the seller, an M&A transaction is a multidisciplinary process, covering different aspects that, in general, are not part of the management experience.

For the uninitiated it is often an intimidating process.

M&A advice provides guidance to clients in all stages of this process. A team of experts works for the success of the negotiation from the initial phase until the successful closing of the deal.

How is an M&A process developed?

The M&A process involves several steps that can vary, among other reasons, with the size and complexity of the buying and selling companies, with the reasons that lead each side to face this process and with the nationality of the parties involved.

Right from the start, M&A advisors have to understand the client’s objective with this purchase or sale and advise them in formulating a strategy for this operation. It is not simply a matter of “putting on sale” on the one hand or “going shopping” on the other. These processes consume time and resources and proper planning avoids rework, wear and tear and disappointments.

For an M&A process to bring the best result to the client, it needs to be structured and developed with clear objectives and planned steps. Since the purchase or sale of a company is not normally a process that ends with the signing of the contract, the operation can take a long period that must be fully planned.

In M&A advice, this strategy depends on whether the customer is the seller or the buyer. The roadmap to be developed in each of these alternatives is as follows:

Advice on the sale of companies

In the sale of a company, it is necessary to balance the demand for information from potential interested parties with maintaining the confidentiality of strategic information in case the business is not concluded.

This sale is a process that, in most cases, is emotionally demanding for the seller. For this reason it must be conducted within a complete planning, in which each of the alternative decisions and their consequences are previously clarified to the seller, who is ultimately responsible for making them.

Preparation:

Clear definition of the transaction object (what is included in the package)
Understanding of the company’s characteristics that translate into value for a potential buyer (ex: sector of activity, absolute size and relative to competition, market share, history of growth and profitability, size and diversity of the customer portfolio, trademarks, quality of management and staff, etc.);
Preparation of results history;
Analysis of the company’s accounting, labor and tax legal organization. Analysis of any contingencies and risks that may hinder the sales process;
Valuation of the company and its non-operating assets that, eventually, will not be part of the process;

Preparation and discussion with the customer of the sales strategy:

Assets included in the operation and assets that may be separable;
Possible measures for correcting risks and contingencies;
Eventual stay of the current owners/managers after the transition;
Price and payment methods;
Schedules;

Preparation of a list of prospective buyers and ranking by order of interest;
Preparation of material:

Initial presentation, without company identification (teaser);
Preparation of a Non Disclosure Agreement (NDA);
Memorandum of Information (MI) preserving the confidentiality of strategic information;

Active prospecting of buyers according to the agreed list (initial contact → teaser → NDA → MI);
Analysis of synergies and advantages of the buyer that may benefit the seller from negotiating conditions;
Negotiation itself;
Preparation of a memorandum of understanding (memorandum of understanding or MOU) and assistance to lawyers to prepare the purchase and sale contract;
Monitoring and analysis of the due diligence process.
Negotiation of the final price and guarantees between the parties;
After-sales:

Monitoring of events covered by warranties;
Calculation of future payment installments;
Calculation of future installments subject to performance (earn-out).

Advisory on buying companies

The process of buying companies requires research and selection of possible target companies that are aligned with the buyer’s strategic objectives.

This purchase is a complex process that requires a careful analysis of each target company, a valuation of its value and the identification of any associated risks and contingencies.

Unlike the service provided to the seller, where advisors have access to virtually all company information, the service provided to the buyer is based on little information available/provided by the seller. For this reason, the evaluation of the target company often involves the judgment of the advisors. In this sense, the advisors’ experience in analyzing the information available to recommend the purchase value is essential in this process.

Preparation:
- Clear definition of the object of the purchase;
- Understanding of the buyer’s needs (ex: sector of activity, absolute and relative size to the competition, market share, history of growth and profitability, size and diversity of the customer portfolio, trademarks, quality of management and staff, etc.);
- Establishment of minimum standards for accounting, legal, labor and tax organization of the company;
- Establishment of ways of financing the acquisition and legal structuring of the operation;
Elaboration and discussion with the customer of the purchase strategy:
Preparation of list of prospective target companies and ranking by order of interest;
Active prospecting of sellers according to the agreed list (initial contact → discussion of interest in a possible transaction → NDA → obtaining information);
Preliminary analysis of each target company and discussion and approval of the client to proceed;
Individual valuation of each target company and analysis of synergies;
Estimated goodwill on purchase and resulting tax benefits;
Final approval by the customer;
Negotiation itself;
Preparation of a memorandum of understanding (memorandum of understanding or MOU) and assistance to lawyers to prepare the purchase and sale contract;
Monitoring and analysis of the due diligence process.
Negotiation of the final price and guarantees between the parties;
After-sales:
- Monitoring of events covered by warranties;
- Calculation of future payment installments;
- Calculation of future installments subject to performance (earn-out).

Technical Standards

Setape’s valuations are always carried out with strict observance of all guidelines set by the ABNT Standards – Brazilian Association of Technical Standards and Ibape Nacional – Brazilian Institute of Engineering Valuations and Expertise.

Why hire Setape?

Complete Advisory

The only company that performs all services of valuation of movable and immovable property, urban and rural, valuation of companies, and has support for asset control (fixed assets).

Proven Experience

With 45 years of activities and more than 80,000 services performed, it is the company with the most experience in evaluating the fixed assets market and in economic evaluations.

Qualified Team

It has its own team with more than a hundred professionals from all specialties.

Satisfied Customers

Quality of services proven by its customers

International Coverage

It belongs to the VRG – Valuation Research Group of international valuation companies with service coverage on all continents

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