2.

M&A Strategy : The Buy Side Process

www.clairfield.com

2010

Contents

Scope and approach of a transaction

The acquisition process on the buy side

Phase 1: Formulation of strategy and decision on process
Phase 2: Preparation of acquisition and search for targets
Phase 3: Preliminary target valuation and indicative offer
Phase 4: Due diligence and binding offer
Phase 5: Negotiations
Phase 6: Confirmative due diligence and contract closing
Phase 7: Integration of the acquired business

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Scope and approach

You are considering acquisitions as a means in your companys current and future growth
strategy. In supporting you, a financial adviser can help you in different aspects of the
acquisition process. He can assist you amongst other with: introductions, collection of
information, evaluation of targets, bid strategy, negotiation and more specifically with the
global coordination of the transaction.
The results of his discussions and analysis will be presented to you by means of a
presentation report in the English language after each important stage in the process.

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Buy Side Process

What are the key stages of the acquisition process?

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Formulation of strategy and decision on process

Your acquisition strategy will, in close cooperation with you, be translated in a search strategy in order to
allow an efficient screening of the market concerned. An important aspect of the search strategy is your
determination of the target criteria.
Set scope and boundaries of
the transaction

Plan and decide acquisition

strategy and timing

Understanding of acquisition need

Understanding of impact on the company

Identification of acquisition criteria based

on client objectives

Agreement on relevant target sectors

Agreement on relevant prices / size

parameters

Discussion on acceptable acquisition

structure

Clarification of preliminary tax and legal

issues

Corporate
strategy

Preparation
Indicative
of
offer
acquisition

Binding
offer

Negotiations

Contract
closing

Integration
of the
acquired
business

Steering of the project

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Preparation of acquisition and search targets

A financial adviser will analyze the Belgian market for you and this initial study will allow the identification of
targets that meet as much as possible your criteria. The study will provide you, besides information on possible
targets, with an initial understanding of the Belgian market, indicating market shares, evolutions, trends, Belgian
requirements etc. Your financial adviser will contact the identified targets (initially in a no-name basis) and verify
the interest in a possible sale of activities or shares.
Identification of potential
target companies

Contact programme

Identify potential targets

Preparation of buyer teaser

Develop long list

Issue short listed targets with teaser documents

Present long list and rank targets

Anonymous contact programme with the owners

(is there a fit?)

of the agreed target companies

Selection of potential targets with

Assessment of targets with regard to possible

regard to contact programme

short list

disposal

Finding out concerns of the target management

Agreement on short list

/ shareholders for potential disposal

Agreement on strategy for contact

Client involvement in discussions (if desired)

programme

Draft revised short list of targets

Agreement on form of

Agree revised short list

documentation and reporting

Corporate
strategy

Preparation
Indicative
of
offer
acquisition

Binding
offer

Negotiations

Contract
closing

Integration
of the
acquired
business

Steering of the project

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Preliminary target valuation and indicative offer

Before formulating a first offer, thorough analysis will have to take place. Your financial adviser will assist you in this
phase, in close cooperation with your internal services, with the drafting of an initial and limited information request.
The information made available will be analyzed and supplemented with information publicly available (annual
accounts, press releases, other public information,). Subsequently we will help you in the formulation of the first
offer. Based on this first bid, the vendor will decide whether you will be invited to the negotiation phase, where
ample information will have to be given by the vendor.
Preparation of
indicative offer

Analyze financing
requirements

Initial meeting with target

Result of
indicative offer

Analysis of the amounts and timing

companies

of financing needed

Draft of an initial and limited

information request and send out

Analysis the information made

available / publicly available

Advise as to pricing approach and

Indicative offer to target

Decision by Target whether to invite

Analysis of the types of financing

to second phase and communication

possible / guarantees to be given

Coordination of the specialist

services provided for tax / legal

optimization

further steps

Formulate indication of value range

Consideration of tactics regarding

targets acceptance of transaction

Legal strategy

Corporate
strategy

Tax strategy

Preparation
Indicative
of
offer
acquisition

Binding
offer

Negotiations

Contract
closing

Integration
of the
acquired
business

Steering of the project

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Due diligence and binding offer

In this phase, your financial adviser will assist you in gathering as much information as possible on the target.
This information will subsequently be used in the negotiation with the vendor, aiming at realizing the
acquisition at the best possible conditions.
Management
presentation /
site visits

Preparation of
due diligence

Preparation of
binding offer

Due diligence

Due diligence

Prepare due

Define strategy for

(financial,
commercial, legal,
tax, HR, IT,
environmental)

diligence and draft

data room index

Send data room index

final negotiations

Preparation of final

offer (given the

results)

Data room visit

Advice on reps and

Supervision of the

Result of
binding offer

Binding offer to

target

Decision by Target

whether binding offer

withheld and
communication

warranties

due diligence process

Drafting of SPA

Formulate questions

Advice on the

implications of the
results of the due
diligence analysis

Corporate
strategy

Preparation
Indicative
of
offer
acquisition

Binding
offer

Negotiations

Contract
closing

Integration
of the
acquired
business

Steering of the project

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Negotiations
During the negotiations with the shareholder of the company and his advisors, your financial adviser will
assist you with the aim to realize the acquisition at the best possible conditions. In close cooperation with
your internal services and with the other advisors to the deal, he will assist you in:

Negotiations

Coordination of all parties involved in the transaction (e.g.

lawyers, accountants)

Identify and anticipate problems

Advice on alternative transaction structures if required

Negotiation with target

Continuing alignment of draft documents

Clarification of legal issues brought up during negotiations

Management of negotiations through closing

Clearance of transaction with target

Signing of SPA

Corporate
strategy

Preparation
Indicative
of
offer
acquisition

Binding
offer

Negotiations

Contract
closing

Integration
of the
acquired
business

Steering of the project

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Confirmative due diligence and contract closing

Filing of transaction
with antitrust
commission

Confirmation due
diligence

Finalisation of legal
documents

Solving due
diligence issues

Completion

The confirmative

due diligence work

through to the
closing of the
contract will be
coordinated by your
financial adviser, in
close cooperation
with your internal
services.

Corporate
strategy

Preparation
Indicative
of
offer
acquisition

Binding
offer

Negotiations

Contract
closing

Integration
of the
acquired
business

Steering of the project

10

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0

Integration of the acquired business

During this phase, you will perform the integration of the acquired business into the
operational structure. The assistance given by your financial adviser will consist of giving an
overview of the issues and information gathered in the acquisition process that can help you
in the integration of the acquired targets.

Corporate
strategy

Preparation
Indicative
of
offer
acquisition

Binding
offer

Negotiations

Contract
closing

Integration
of the
acquired
business

Steering of the project

11

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Syncap Management gmbh, member of Clairfield Partners

Hans Buysse, Partner

+32 475 44 46 32
www.clairfield.com

2010 12
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