Merger

It is important to have a clear picture of the organisations and their motivation to merge prior to a corporate merger. By merging, companies often want to strengthen their (joint) position. For the merger to take place successfully, it is important to set a goal in advance so that it is clear what is to be achieved. In this, we also describe the entire process and tell more about our organisation. In a merger, it is recommended that both parties choose to engage their own advisor.

Work acquisition advisor in this step includes;

A company visit
Determining needs and objectives
Delving into the company’s earnings model and business model
company
Mapping out the organisational structure
Advising on strategic choices

To have a good starting point for negotiations, it is important to establish what the value of both companies would be on the open market. Match Plan is a member of the Netherlands Institute of Register Valuators (NiRV) and has several official Register Valuators on the team who specialise in valuations. This helps to provide an independent and well-founded assessment of the value of the businesses.

Work of acquisition consultant in this step includes;

Collecting business information; both financial, operational and strategic
Determining valuation method
Drawing up a valuation model
Record valuation results in a valuation report

Na het vaststellen van de waarde van de ondernemingen is het tijd voor het onderhandelingsproces. Een aantal belangrijke onderhandelingsuitkomsten zijn bijvoorbeeld: hoe groot wordt het aandelenbelang van beide partijen in het nieuwe bedrijf, hoe komt de nieuwe directie en het management eruit te zien en hoe wordt de bedrijfsfusie gefinancierd. Aangezien bedrijven die gaan fuseren elkaar vaak al goed kennen is het de taak van een overnameadviseur om rationeel naar de situatie te kijken.

Work of acquisition counsel in this step includes;

Analysing both valuation reports
Commercial advice
Conducting negotiations
Recording valuation outcomes in a valuation report

Based on the outcome of the negotiations, various transaction documents are drafted. These are documents in which the outcomes of the negotiations and future steps are recorded and secured.

Work acquisition advisor in this step includes;

Cooperation agreement
Shareholders’ agreement
Management agreements
Incorporation of the new company and setting up
of the new organisation

The new organisation is a lot larger than the two former separate organisations. With a larger organisation, other funding structures may be more appropriate and conditions may also change. So it is important to understand the new organisational structure and put in place a new financing structure appropriate to the customer needs.

Work acquisition advisor in this step includes;

Refinancing existing working capital facilities (factoring line and current account)
Refinancing existing lease bond
Refinancing long-term loan
Set up new working capital facility and lease facility
Improve banking conditions (collateral and rates)
Cleaning up balance sheets

After establishing the financing requirement, we will start preparing the financing memorandum. This is a document in which we summarise the full financial situation within the merger. This document outlines the situation of the two individual companies before the merger and then the new situation after the merger. It also immediately summarises the funds to be repaid and the new funds to be financed. We then send this document to various financing parties, identifying the most suitable financing parties depending on the company. These parties then make an indicative proposal, which our financing experts will compare and negotiate. After choosing a financing partner, it is time to draw up the new financing structure.

In this step, activities of the takeover advisor include;

Drafting a financing memorandum
Submitting financing requests to various banks
Meetings with financiers to get acquainted
Comparing indicative term sheets
Supervising the switch from one bank to the new bank
Going through the financing and customer acceptance process at the bank
Assisting in signing financing documentation

Once the basis for the new company has been shaped, due diligence, or bookkeeping, follows. This investigation is important to check whether the information provided by both parties actually matches the actual situation.

Activities of the takeover advisor in this step include;

Preparation of a data room with all available documents and
company data.
Assessing the findings from the due diligence investigation. We
analyse the findings of the due diligence investigation and determine
whether these findings are in line with previously provided information and whether the
merger can proceed on the basis of the same assumptions
We also analyse the due diligence report prepared by the
advisors of the other merger party

In this concluding step, the contract negotiations are finalised. For example, it often happens that the bookkeeping investigation has revealed (just) different results from what the parties provided during the negotiations. This is then subject to final negotiations and the final contracts are drawn up. The various current accounts between the merger partners and their holding company are also settled at this stage.

Activities of the takeover advisor in this step include;

Final negotiations on the results of the due diligence investigation
Recording the agreements of the final negotiations in the contract documentation
Finalising all documentation and relevant legal documents within the entire process, including finalising financing documentation

This is the final step in the merger process; the notary formally completes the process.

Work acquisition advisor in this step includes;

All agreements are signed
The shares are notarised
The funds are transferred
The new financing is provided

One of the most common mistakes is to merge two companies with completely different corporate cultures. The business activities can be so nicely aligned and the synergies so great, if the corporate culture is too far apart, a merger is often not a good plan.

When two companies merge, it is common for the former owners of both companies to acquire a percentage of shares in the newly created organisation. When the two companies are of different sizes, the percentage of shares in the new company often becomes so small or large that the merger has actually become more of an acquisition than a merger. As a result, there may still be limited scope for entrepreneurship; consider this carefully beforehand.

A corporate merger is not something you do every day as an entrepreneur. For an acquisition adviser, it is. Many different aspects are involved, and the stakes are often high. An acquisition advisor guides you through this entire process and will save you from making (big) mistakes.