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M&A Mergers and Acquisitions

Acquisition of companies, sale of companies, mergers and alliances

Why IMAP Albia Capital

M&A services make up the core activity of IMAP Albia Capital, which was created to provide services to middle market companies and entrepreneurs in their processes to sell, acquire and merge firms and perform other M&A actions required for developing a company’s strategy.

IMAP Albia Capital and its team have advised on more than 200 M&A operations in the last few years, focusing heavily on managing the business fundamentals and their positioning, rather than on handling the exclusively or fundamentally financial transactions which are not favourable to midmarket companies’ actions.

In this sense, all of IMAP Albia Capital’s operations are analysed from a strategic, commercial, operational and financial standpoint, and the potential buyers are screened based on these parameters.

To ensure a transaction’s success, the aforementioned screening must be made with an overall view, which is why IMAP Albia Capital is a member of an international network, providing a global M&A service through the Group’s branches around the world.

The following service groups form part of the M&A business line:

Sale of companies, divisions or activity lines

The sale of a company or business line is a complex process which requires:

  • A methodology,
  • High technical qualifications,
  • Experience which helps to resolve the complex situations that take place during the process and
  • Considerable time and resources.

Although all of this does not assure success, if the aforementioned requirements are met, the probability of a successful company sale process is substantially higher.

At IMAP Albia Capital, we perform an in-depth analysis of the type of company addressed by the sale, as well as its strategic positioning, products, sales strategy, operating position, efficiency, technological knowhow and financial situation.

Based on this analysis, we plan a company sale process by focusing on its highlights and researching purely strategic potential buyers, seeking the business aggregates that they would be interested in when buying a firm.

To identify the potential buyers, IMAP Albia Capital employs the strategic business development analysis method by using the vectors of ascending and descending vertical integration, horizontal integration and the concentric.

After identifying the profiles of the various company buyers, a global search of companies that meet the profile is made in all the countries defined as potentially interesting for this search. To do this, IMAP Albia Capital is supported by the local partners that are members of its IMAP international network and by other international offices with which it usually collaborates.

Based on the potential buyers’ profile, the necessary documents will be drafted to present and promote the company so that it can be assessed.

IMAP Albia Capital participates and directs all the negotiations with the potential buyers, advising its clients throughout the sale process and relieving them of managing the process permanently. In the various phases of the process, the company, thanks to its long experience in these types of operations, will propose different options to the client with the aim of resolving any problems that may arise.

The advisory service continues during the due diligence, negotiating its results and collaborating with and supporting the client’s legal team when negotiating and drafting the final sale agreements.

Acquisition of companies, divisions or activity lines

That is why IMAP Albia Capital fosters the design of a Corporate Development Strategy among its clients before starting the process to search for the potential targets so that the buyer knows what it wants to buy, what product(s) and technology it wants, and what current and potential markets there are.

Once these objectives have been defined, we screen the target markets for the company, supported by the IMAP international network, identifying the potential targets and prioritising them based on their strategy and degree of contribution.

After prioritising the candidates, or when the purchase order is for a specific company, we begin the initial contact, where IMAP Albia Capital acts as the negotiator, protecting the identity of the company’s potential buyer, and start the talks to assess the other party’s interest and tell them of the advantages of the operation for the target and its shareholders.

If we infer from the preliminary talks that the analysis phase can be started, a non-disclosure agreement (NDA) is signed between the parties. In this phase, IMAP Albia Capital finds out more about the target company by analysing its products, markets, competition, competitive positioning, technology, organisation, main processes, production and financial situation. This analysis is shared and cross-checked with the client, with which we draft a plan for the target company, based on which an assessment will be made for its acquisition.

The next phase consists of defining the bid strategy based on the analysis made, the situation of the company and its shareholders and other internal and external factors, which are specified in a non-binding offer.

The negotiating process starts with the issue of the bid; the main parameters of the potential company acquisition such as the price, conditions, guarantees, confidentiality and non-competition will be negotiated. This is usually a long and psychologically exhausting process which requires a lot of time, effort and exhaustion, which is why IMAP Albia Capital assumes most of the effort, relieving the client of its consequences and focusing on managing its current business. If an agreement is reached for the non-binding offer, it is signed by both parties and the due diligence phase starts.

In the due diligence phase, several professionals (auditors, tax, labour and commercial lawyers, etc.) will be involved. IMAP Albia Capital will coordinate them and direct them towards the points identified as being relevant in the preliminary analyses.

Once the due diligence is completed, we begin the last phase of a company acquisition by negotiating the conclusions of the aforementioned audit and drafting all the necessary legal documentation (contracts, shareholder agreements, side letters, etc.), in which IMAP Albia Capital collaborates closely with the client; this phase is completed when the purchase contract agreed by the parties is converted into a public document.

Buy Outs (MBO, MBI, LBOs, BIMBO)

The purchase of a firm or a company division by an internal or external management team is a process which requires, in addition to the usual phases of a company acquisition, a number of factors that will condition whether or not it is feasible to buy it such as:

  • The transaction’s viability: the viability of a leveraged buy-out without having the support from the parent company or acquiring group.
  • Capturing equity by including financial partners that support the management team in the buy-out.
  • Obtaining bank, institutional or other sources of financing by getting the company into debt.
  • The operation’s structure.
  • The project design and business plan to attract external funds for the management team and have guidelines and objectives that the business must meet to deal with the leveraged buy-out.

We actively work with venture capital firms, and some members of our team have been outstanding professionals in the venture capital sector and in investment companies.

For the buy-outs, we start by providing advice to the management team regarding the analysis of the business to be acquired, the business plan’s design and its assessment and the design of the transaction structure to be carried out with the inclusion of financial partners and indebtedness.

After defining the plan, we participate in its execution by selecting the private equity profiles that conform to the project, starting talks with them and defending the project, its plan and its key financial and business points. We also prepare and present the project to financial institutions with a view to its financing and we negotiate the company buy-out with its current owners.

In short, we provide an overall service, where we permanently accompany the management team throughout the process and in the three basic vectors of this type of operation: the buy-out and the obtainment of equity and debt.

Mergers and Joint ventures

Mergers, integrations and joint ventures among companies are probably the most complex processes in corporate finance.

They are comprehensive processes that affect all the company’s areas and where many problems arise. This process must start with a solid foundation and with the conviction that there is a need for this from both parties, which must obviously come from prior thought, where a strategic planclearly envisages this option as the best for the companies involved.

Based on the parties’ convictions, it is necessary to perform an in-depth analysis of all the company’s areas (design, engineering, production, marketing, human resources, finance, facilities, markets, etc.) with the aim of designing a new entity that makes the most of all its parts and tries to correct or avoid each part’s weaknesses.

In all the cases, we must subsequently assess each part’s contribution and, what is more complicated, each part must acknowledge and assess the other part’s contribution, which is an arduous task with long negotiations.

Based on all of this, we establish the swap equations or the stakes in the new company and the development plan for all the necessary actions with the aim of reaching the desired final picture.

In short, this is a very complex and long multidisciplinary process where the professionals’ involvement is fundamental for several reasons:

  • The company owners and managers will neglect their current business management because they have to devote a lot of time to this type of process, which will have serious consequences for the business whether or not the transaction is completed successfully.
  • A third party will provide some objectivity as well as professionalism to the plans.
  • The experience of a professional multidisciplinary team involved in the project helps to resolve the difficulties arising during the process by providing prior case studies, creativity and solutions so that it can advance.

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