PRIVATE EQUITY | REALISE
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PRIVATE EQUITY | REALISE
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MANAGING THE DEAL PROCESS
Detailed preparation and planning enhance value and delay surprises. Using a straightforward and structured approach to every transaction mitigates risks and drives value at each step of the process. The deal process is set out below over several steps, including those that should be considered well in advance, with a high level view of matters to be considered at each stage. BDO’s Private Equity group is a highly collaborative network of more than 400 experienced advisers with deep sector and industry knowledge. This practical, real- world team has a profound understanding of the Private Equity industry, particularly in the mid-market. Our people can configure and tailor these steps to meet your needs at every level, interacting with funds, advising on deals and working closely with portfolio companies to help them realise their goals.
TRANSACTION READINESS – >2 YEARS PRE-DEAL
TRANSACTION PROCESS – TYPICALLY C.4-6 MONTHS
POST TRANSACTION
PATHWAY TO SIGNING
NEW STRUCTURE
COMPETITIVE TENSION
SALE PROCESS
BUYER INTELLIGENCE
BUSINESS PLAN / KPIS
INFORMATION PRESENTATION
TIMING DISCUSSIONS
X Assessment of: X Exit readiness X Buyer attitudes X Market dynamics X Track record of profit progression X M&A opportunities X Critique management team appetite and talent pipeline X Frame material tender / contract renewal timings
X Express clear and
X Align to investment hypothesis X Granular preparation with supportable assumptions X Commercial due diligence (DD) should validate top line X Include selected outputs in marketing materials X Consider scenario planning X Assess and quantify potential upsides
X Pre-qualify to credible buyers’ list X Get to know interested parties (financial and strategic) X Share selective data to whet appetite X Assess synergies (if relevant) X Ensure VDD scoping covers key buyer questions X Seek best possible funded offers
X Present supportable EBITDA measure for valuation X Prepare insight-led vendor due diligence (VDD) materials X Manage PR / media interest X Narrow the buyer field X Establish data room X Consider staple financing option X Hold management presentations
X Control access to management X Well-managed Q&A process with timely responses X Ensure a range of potential buyers X Avoid surprises (eg short-term targets are met) X Reiterate key messages
X Controlled access to VDD providers X Timetable discipline X Sales and Purchase Agreement (SPA) guidance and support X Provide current trading update as appropriate X Deliver optimal tax structure X Negotiate final offers and deal completion
X Input into 100 day considerations X Assess wealth
consistent articulation of value story X Prepare KPIs aligned to stated strategy X Ensure a robust control environment and scalable infrastructure X Define operational plan X Frame impact of innovation / digital disruption X Assess potential tax exposures / mitigants
management options
X Implement revised
reporting requirements
X Work through any integration issues X Draw up pipeline of M&A opportunities
(eg trading resilience / underpinning, cash conversion)
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