M & A

The M&A Process

VALOREM provides the experience and resources necessary to achieve the process efficiencies, cost savings, and competitive advantages inherent in merger and acquisition activities.

 Why Use A Consultant To Sell or Buy A Business?

Owners and managers have found that the use of a financial consultant or intermediary in the process of selling or buying a business provides a number of important advantages.

Confidentiality – The intermediary can preserve the confidentiality of the selling/buying company during initial contacts with prospective buyers/sellers, thus restricting knowledge of the identity of the buyer/seller on a “need to know” basis. The intermediary is also able to screen out unqualified buyers.

Advisory Role – The financial consultant can provide the owner of the business with advice on the timing of initiating the sale or acquisition effort, the value of the business being sold or acquired, the appropriate asking or offer price and the structuring of the transaction that would be most advantageous to the owner.

Knowledge of Potential Buyers/Sellers – A merger and acquisition consulting firm, in the course of its normal activities, becomes aware of and tracks the acquisition criteria of potential buyers and sellers.

Facilitator Role – The intermediary keeps the merger and/or acquisition process moving forward with prospective buyers and sellers. The intermediary is in a better position to do this than the owner of the business because an owner who appears over-eager will find himself negotiating from a position of weakness. The consultant also spares the owner considerable time involvement in the sale or acquisition process, allowing the owner to devote more of his energies to running the business.

Negotiation Assistance – By serving as “point man” during the negotiation process, the intermediary can establish a strong bargaining position on behalf of the seller or buyer without compromising the goodwill between the principal parties.

Use of an experienced and capable intermediary will help assure that the seller receives the best price for his company. Likewise, the intermediary will help assure that the buyer does not overpay for a particular acquisition. The merger consultant sells and buys companies as a profession. Most owners may do it only once in a lifetime.

Services For Sellers

For owners considering the sale of their company, Hempstead & Co. Inc. provides the following services:

Determining the value of the business to be sold

Preparing an information package describing the company to be sold

Identifying and ranking qualified prospective buyers

Approaching prospective buyers on behalf of the seller on a confidential basis

Assisting the seller in evaluating offers and negotiating terms of the transaction

Facilitating consummation of the transaction in conjunction with the seller’s legal and tax advisors


Services For Buyers

Hempstead & Co. Inc. also provides consulting services for parties seeking to make acquisitions. Services provided include the following:

Assisting the buyer in defining his acquisition criteria

Developing lists of prospective target companies through the use of computer databases and other reference sources

Approaching the target companies on behalf of the buyer to ascertain their willingness to consider acquisition

Developing information to assist the buyer in analyzing target companies

Assisting in arranging financing needed to bring about the transaction

Assisting in the valuation, structuring and consummation of the acquisition transaction


Management Buyouts

Often the best qualified buyer of a company is its current management. Hempstead & Co. Inc. can help a management team buy out a business by providing assistance in structuring, negotiating and financing the transaction.

The M&A activity in six steps

Each with well-defined sub-steps to be followed by participants

1. Preliminary Assessment. Identify and assess the target.

2. Proposal Phase. Craft the initial non-binding offer or indication of interest.

3. Due Diligence Process. Tailor the due diligence request, establish rules of review and consider market blackout to comply with securities law.

4. Definitive Agreement Negotiation. Review the proposal, prepare schedules and prepare draft 8-K filing.

5. Pre-Closing Phase. Move to meet closing conditions. Arrange the Hart-Scott-Rodino filing.

6. Integration. Ensure the new unit conforms to companywide regulations.