PRIVATE EQUITY | NAVIGATE
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PRIVATE EQUITY | NAVIGATE
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PLOTTING THE INVESTMENT PROCESS
PHASE 1: EXIT REDINESS PHASE 1: EXIT READINESS 3-6 MONTHS
6-9 MONTHS
9-12 MONTHS
12-15 MONTHS
15-18 MONTHS
Entering into a Private Equity (PE) investment is an exciting but all-consuming experience. BDO’s
PHASE 2: PREPARATION
PHASE 3: MARKETING
PHASE 4: DEAL COMPLETION
GOALS X Obtain stakeholder buy in X Early preparation and identification of deal issues X Assess all funding options. PREPARATIONOPTIMISES FUTURE VALUE X Build and develop the 3-5 year business plan model X Assess incumbent management team ability and identify gaps X Plan to optimise trading, working capital and cash performance X Assess business systems and “fitness” to deliver the right financial and operational information X Consider existing financial structure, flexibility and implications of a deal X Consider the impact of any judgmental accounting policies X Early assessment and planning for tax implications of a deal for key stakeholders.
GOALS X Stimulate the PE audience X Drive competitive tension X Obtain offers. LAUNCH THE SALES PROCESS, MARKET THE BUSINESS AND SECURE OFFERS X Issue “teaser” and secure interest under a non-disclosure confidentiality agreement X Active discussion and positioning of the investment opportunity with PE X Measure and manage interest to deliver non-binding PE offers X Shortlist parties and provide additional access to management and materials X Coordinate and deliver management presentations to key potential buyer X Respond to questions and queries arising from the Information Memorandum and other materials, including potential Vendor and Commercial due diligence X Manage potential buyers advisors X Secure funded offers from PE.
GOALS X Close a deal with a preferred PE investor X Manage interaction of legal, tax and financial aspects X Achieve optimal deal structure and vendor protections. FINAL OFFERS AND DEAL COMPLETION X Determine preferable offers and complete final assessment with stakeholders X Choose PE investor and manage underbidders X Negotiate to completion of Sale and Purchase Agreement to match below and documentation, considering the following: – Price/consideration and timing – Terms – Warranties and indemnities/seller disclosures – Closing mechanism and any post-deal adjustments X Complete equity deal and service contracts for “new” management X Deal closing and any associated conditionality or clearances required X Plan for the first 100 days under PE ownership.
GOALS X Agree deal approach and timetable X Identify risks and plan mitigation X Prepare the deal materials. FOCUS ONVALUE DRIVERS AND ENSURE QUALITY OF INFORMATION X Complete the business plan and supporting financial model that tells the the investment and growth story X Prepare the Information Memorandum and other supporting sales materials X Compile and carefully assess supporting financial and operational information X Securely catalogue and host data in a logical and accessible online dataroom format X Formalise timetable and approach, draft process letter X Consider benefits of a dual track PE/IPO approach X Prepare shareholder consents and support to the timetable X Complete statutory audits, health and safety, taxes and pensions and other core assessments in good time X Consider use of an independent Vendor Due Diligence (VDD) report to support the sales process.
collaborative and dedicated Private Equity team runs an
efficient deal process during all phases. We do the heavy lifting which means management can focus on running the business and building value, maintaining trading performance and not becoming distracted with the deal. Our people focus on the drivers of value for Private Equity, mitigating risks and bridging the gap between the entrepreneurial and institutional mindsets. This illustrative diagram provides a high-level overview into a typical investment process and timeline.
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