purchase or sell a company
Mergers & Acquisitions (M&A) advisory
You have successfully built up a company and now want to sell it (exit / succession)? Or you would like to grow faster through a company purchase? We know the situation from our own experience and many consulting projects. We support entrepreneurs by taking over essential process steps so that they can continue to take care of their daily business.
Exit or succession
Sell your company
The sale of a company or part of a company is a complex process that is not part of the everyday tasks of an entrepreneur. Experience shows that the sales process is more successful if it is structured and organized. MMC Finance supports you in the preparation, buyer approach, analysis and closing of the transaction. Although every transaction is unique, we have a brief description of the main steps below.
Procedure
01
Preparation
In the preparatory phase it is important to coordinate the interests of the parties involved. If the management does not hold all the shares in the company, mechanisms should be put in place to motivate the management for the sales process. Furthermore, MMC Finance prepares a valuation of the company. For this purpose, different methods like discounted cash flow (DCF), multiples or comparative transactions can be applied. The valuation is important to give the sellers a realistic picture of the expected purchase price.
The preparation of documents takes up a significant part of the preparation time. MMC Finance prepares a teaser (short company presentation without mentioning the company name), an information memorandum (detailed company presentation). The Information Memorandum contains information about the products and services offered, markets, competitors, competitive advantages, customers, sales and marketing, suppliers, historical and forecast financial figures. Furthermore MMC Finance prepares a list of potential buyers (Longlist). The longlist is discussed with you and the preferred buyers are selected (shortlist).
02
Contact potential buyers
In the approach phase MMC Finance contacts the potential buyers on the shortlist and sends them the anonymous teaser. Only after receipt of a signed confidentiality agreement (NDA) will the potential buyers receive your company name and the detailed company presentation (Information Memorandum). Together with you, we will prepare a management presentation in which you personally introduce your company and your vision for the future development of the company to selected potential buyers and their advisors and answer questions. After the management presentation, the potential buyers will be asked to submit a non-binding indicative offer based on all information received. In addition to the purchase price, the indicative offer should include the potential buyer’s vision for the future of your company.
03
Analysis
In the analysis phase we compare and evaluate the indicative offers received together with you. Selected potential buyers may proceed with the due diligence (detailed examination). They are given access to a data room that we have structured with you in advance. The data room contains, among other things, important contracts, patents as well as customer and employee information. MMC Finance maintains contact with the potential buyers and answers their questions. MMC Finance also structures the negotiation process and coordinates the cooperation with lawyers. After completion of the due diligence, a purchase agreement is proposed to the interested buyers.
04
Closing
The closing phase begins with the signing of the purchase contracts at the notary (signing). It is often necessary to obtain the approval of the cartel authorities. Then the purchase price payment (closing) will take place later. Due to the time difference, it often happens that the purchase price depends on the condition of the company (bank account balance, inventory etc.) at closing. Furthermore, a part of the purchase price is often paid much later (earn-out). This enables the potential buyer to reduce his risk by making partial payments depending on future milestones (e.g. sales, customers, technical development) and motivate the management of the company.
sell your company
Statements of our clients
MMC Finance advised us on the sale of Amovis GmbH to the Mahle Group. Based on his extensive experience, Dr. Wehrheim prepared the necessary documents and approached suitable companies from the industry. With the help of Dr. Wehrheim we could successfully complete the exit. We can highly recommend the cooperation with MMC Finance.
Dipl. Ing. Jörg Collisi
(Managing Director of Amovis GmbH)
grow faster with an acquisition
buy a company
For many entrepreneurs, accelerating the growth of their business is of great importance. In addition to organic growth (increasing turnover with existing customers or by acquiring new customers), it is also possible to grow through the acquisition of companies.
The acquisition of companies or parts of companies is a complex process that is not part of the everyday tasks of an entrepreneur. Experience shows that a company acquisition is more successful if it is structured and organized. MMC Finance supports you in the preparation, approaching of companies, the analysis of company information in detail until the transaction is completed. Although every transaction is unique, we have listed below a brief description of the essential steps.
Procedure
01
Preparation
In the preparation phase it is important to discuss the framework conditions for a company acquisition. If you have not yet identified any potential acquisition candidates, we will discuss with you in a workshop in which areas (industry, product groups, regions, etc.) and in which size (turnover, employees, profit, purchase price, etc.) an acquisition is possible. MMC Finance records the acquired information in a search profile. MMC Finance can then carry out a systematic search in selected markets to arrive at a list of many possible purchase candidates (longlist). The longlist is discussed with you and the preferred companies are selected (shortlist).
02
Approach and Analysis
In the approach phase, MMC Finance contacts the companies on the shortlist, checks the interest in a takeover and collects the company information received. Some owners are very reluctant to disclose information about their willingness to sell. It is therefore important to proceed in a very professional and trusting manner during this phase. It is often possible to obtain further information about the company to be bought after signing a confidentiality agreement (NDA). If the company is supported by a consultant within the framework of a structured process, it is usual to receive a detailed company presentation (Information Memorandum). An Information Memorandum contains, among other things, information about the products and services offered, markets, competitors, competitive advantages, customers, sales and marketing, suppliers, and historical and projected financial figures.
In the analysis phase, we work with you to compare and evaluate the information received and select purchase candidates for which we want to pursue the process. In this phase it is often possible to organize a first personal meeting with the management of the company to be acquired and to clarify questions.
03
Analysis
Based on the information obtained, MMC Finance prepares an initial valuation of the company to be purchased. The valuation agreed with you will be communicated to the owners of the purchase candidate in the form of a non-binding indicative offer. The indicative offer should contain the assumptions for the indicative valuation of the company, the source of funds for the payment of the purchase price and a list of all conditions for the closing of the transaction. MMC Finance will coordinate with the seller in this regard.
If agreement is reached on the rough outline of a takeover, due diligence (detailed examination) can begin. Usually, the buyer and MMC Finance will have access to a data room containing important information on financial, legal, tax, business and technical aspects. MMC Finance, in cooperation with other consultants, such as lawyers, analyses the information provided. MMC Finance not only takes over the coordination – as other consultants do – but also carries out the complete financial due diligence and asks the seller any questions that arise. After completion of the due diligence, a purchase agreement is proposed to the seller, which is prepared in cooperation with an experienced M&A lawyer. Based on the results of the due diligence and the clauses of the draft purchase agreement, MMC Finance determines the final purchase price and structures the negotiation process with the seller.
04
Closing
The Closing phase begins with the signing of the purchase contracts at the notary (signing). It is often necessary to obtain approvals from cartel authorities and general meetings of listed companies. Then the purchase price payment (closing) will take place later. Due to the time difference, it often happens that the purchase price depends on the condition of the company (bank account balance, inventory etc.) at closing. Payment of a partial amount can be made to a notary public escrow account (collateral account) to check guarantees such as stock levels before payment is made to the seller. Furthermore, a part of the purchase price is often paid much later (earn-out). An earn-out enables you to reduce your risk by making partial payments depending on future milestones (e.g. sales, customers, technical development) and, if necessary, motivate the management of the company.
buy a company
Statements of our clients
"MMC Finance advised us on the selection and review of innovative companies as an acquisition option. Dr. Wehrheim has made his extensive network available. The list of candidates prepared exceeded our expectations. We were able to establish many new contacts and examine purchase options. We are looking forward to further cooperation."
Markus Kersting
(Managing Director of Dewert Okin)