Smergers Overview

Transcript

1. Private & Confidential SMERGERS Overview May 2013
2. Contents 2 Title Page SMERGERS Value Proposition 3 SMERGERS Services - Sell Side 4 - Buy Side 5 - Information Memorandum Preparation 6 - Business Valuation 7 - Business Research 8 SMERGERS Contacts 9
3. SMERGERS Value Proposition • SMERGERS is a Mergers & Acquisitions (M&A) Advisory Firm focused on SMEs (Small and Medium Enterprises) in India • We provide strategic advisory services for corporate mergers, acquisitions and other types of financial transactions. We also assist companies in raising funds from Venture Capital (VC) and Private Equity (PE) Firms • Apart from being a Business Intermediary, we provide services across the entire deal cycle including company valuation, information memorandum preparation, business plan preparation, teaser preparation, business research, buyer/investor shortlisting, target company mapping, etc • SMERGERS is comprised of professionals with significant experience in advising both domestic and cross-border M&A transactions 3 Our proprietary technology platform helps connect companies with strategic partners and financial investors. Our mission is to set standards for the industry, where none exist today • Strategic Planning • Business Plan Preparation • Business Research • Investor Shortlisting • Business / Startup Valuation • Advisory Services through the process • Business Research • Target Company Mapping • Target Company Reach Out • Business Valuation • Transaction Structuring • Buyer Representation Buy side Fund Raising We connect investors, buyers and sellers of SME businesses in India via our technology platform www.smergers.com M&A Advisory Services • Strategic Advisory • Teaser Preparation • Information Memorandum Preparation • Business Valuation • Buyer / Investor Shortlisting • Seller Representation Sell side
4. Sell-Side Process The ability to successfully complete a transaction is enhanced by our technology platform www.smergers.com, which offers access to large number of qualified buyers 4 Financial Advisory Portfolio review with a view to identifying potential disposal targets Co-ordinate Management presentation and site visits Assessment of offers and finalize optimal deal structure Co-ordinate Negotiation & finalization of definitive agreements Transaction Closure Program Management of the due diligence & negotiation process Screening of interested parties Preparing Info memorandum & Marketing Indicative offers Vendor due diligence & data room Final offers Exclusivity agreed Share Purchase Agreement Preparation of information on the operations for advisors and data room Teaser profile, info memorandum and business plan preparation Identification and introduction of potential strategic/financial investors
5. Buy-Side Process 5 Deal Selection Valuation Letter of Intent Due Diligence Transaction Structuring Negotiation Share Purchase Agreement Market Mapping  Target industry selection  Primary and Secondary research based mapping of target industry  Identification, qualification, and recommendation of potential Target Companies  Reach-out and Solicitation of interest from potential Target Companies  Engage, as appropriate, Target Companies in strategic discussions  Co-ordinate management meeting and presentations Valuation & Due Diligence  Financial modeling and DCF valuation  Comparables based valuation – Trading and Transactions  Validating business case, sales growth rate, EBITDA and earnings  Analysis of key agreements (customer, supplier, etc.)  Key forecast assumptions compared to historical precedent  Analyzing capital expenditure requirements  Identifying off balance sheet liabilities  Coordinating the Due Diligence process Transaction Structuring  Structuring the transactions as an Asset Sale vs. Stock sale  Commentary on effective tax rates  Impact on contingent liabilities and contracts  Accounting impact of transaction structure  Impact on tax liability post transaction  Review current compliance status  Review of tax benefits and their availability in future SPA Negotiations  Negotiating commercial terms and conditions of SPA  Scrutiny of Representations and Warranties, and Indemnifications  Tracking Conditions Precedent to closing  Assist in preparation of Share Purchase Agreement  Disclosure schedules tracking  Normalized Working Capital and Closing cash level agreement and calculations  Identification of debt and debt type items  Cash transfer and Escrow handling SMERGERS brings you exclusive investment opportunities and guides you through the entire process We ensure you receive all relevant commercial & financial information to make an informed decision
6. Confidential Information Memorandum (CIM) 6 CIM is an important document used to market a business to prospective buyers. If you are planning to sell your company or raise funds for growth, you need to keep a CIM ready to be shared with potential buyers / investors. We help you put together a CIM with all important information about your company and industry. Based on our experience, we understand the key elements which investors/buyers look for in a good company before investing. We bring out the highlights of your company and position it appropriately to attract the best investors/buyers. A clearly articulated CIM positioning the company appropriately will fetch a premium valuation Industry  Market Size and Growth  Industry Trends  Market Opportunities  Competition Analysis Company  Investment Highlights & Positioning  Client overview  Operation Overview  Financials - Historical & Projections  Management Team Process  Sale Process Details  Proposed Transaction Structure  Timing for receipt of Letters of Intent (LoI) CIM
7. Our experience, expertise, and knowledge of prior transactions in the industry enables us to precisely value your company Business Valuation Business Valuation is the process of determining the economic value of a business or company. Both sides of an M&A deal will have different views on the value of a company. Assigning a monetary value which is acceptable to both parties is as much art as it is science. However, there are many well accepted ways in which businesses can be valued. Common approaches to business valuation include Discounted Cash Flow (DCF), Trading Comparables, and Transaction Comparables method. 7 Investment bankers widely use this method to value a company during an acquisition. Technically, this method is similar to trading comps. But the comparables used are companies which have previously undergone a takeover, rather than peers which trade on the stock market. Takeovers generally value the company higher because of a control premium paid by the acquirer. As per the Efficient Market Hypothesis at any given time, stock price valuation fully reflects all available information on a particular company and industry. Therefore trading companies provide the best estimate for valuing a similar company. Average multiples for an industry such as P/E, EV/EBITDA, EV/Sales, P/B, etc. are used to estimate your company’s value. Trading Comparables (trading comps) Transaction Comparables (transaction comps) It is widely believed that DCF is the best method to estimate the fair value of a company/business. As one would expect, the value of any company is the sum of the cash flows that it produces in the future, discounted to the present date. The discount rate used is the appropriate Weighted Average Cost of Capital (WACC) that reflects the risk of the cash flows. Discounted Cash Flow (DCF)
8. Business Research Business Research is the process of accumulating, analyzing, and presenting information on industries, markets, companies, and countries. The information is sourced from news articles, company filings, annual reports, industry databases, analyst reports, industry leader interview transcripts, and other syndicated reports. Market research is a process where we gather first hand information on clients competitors, customers, etc. through interviews and surveys targeting specific audience. We help you answer the following questions: What is your market size and market share? What are high growth segments in your industry? What’s your corporate strategy and where should you diversify? What’s the optimal strategy for competing with your peers? What’s driving your company’s valuation? What do PE / VC firms look for in your industry? and more… 8 Our research provides insightful knowledge on your Industry for you to make effective business decisions
9. Contacts To know more about us: 9 Online Valuation Tool Industry Watch Browse Business Opportunities List your Business for sale Click to get started Register as a Buyer / Investor Team SMERGERS Website: www.smergers.com Email: contact@smergers.com Phone: +91 99728 84848