We have substantial experience in working closely with family-owned businesses that face new challenges, including issues relating to growth strategies, increasing competition created by globalization trends, and management succession. These companies see great opportunities in growing Asian markets, however, strategies and capabilities often need upgrading.
In addition, we work with American and European companies to implement their Asian strategies. These assignments typically involve entry or expansion strategies into Asia, while others relate to the realignment of non-core assets.
How we work – a typical “sell-side” strategic advisory assignment
1. Information memorandum and investor marketing materials
We produce an information memorandum to market the transaction to a wider range of prospective buyers or investors. A high quality information memorandum contributes significantly towards a successful transaction, enabling better understanding of the transaction by interested parties and creating a stronger market.
2. Valuation analysis
We conduct a valuation analysis, including a discounted cash flow analysis, trading multiples of publicly listed comparable companies and data on comparable transactions, to assist buyers and investors in determining the fair value for the transaction.
3. Data room
We prepare a data room to enable a large number of prospective buyers and investors to conduct their due diligence on an efficient timetable. The use of a virtual data room would enhance this step.
4. Investor targeting and marketing
Once the above preparatory work is completed, we develop a thoughtful and high quality list of target buyers and investors. Our partnership with Morgan Stanley gives us access to a global network of companies and investors.
5. Investor due diligence
We manage the due diligence process to ensure that investors receive their required information without burdening the client with unreasonable or unnecessary requests. We can assist in coordinating with our client’s other professional advisors to ensure smooth execution of the transaction.
We lead or assist in the negotiations between our client and prospective buyers and investors, advising on negotiating strategies and transaction structure, and on the commercial aspects of technical terms required in legal documentation.
7. Company Management
Whilst maximizing shareholder value, we ensure that the deal structure and process will accommodate Management’s interests (which are often overlooked) to facilitate a successful transaction.
How we work – a typical “buyside” strategic advisory assignment
1. Finding the opportunity
In many cases, our clients contact us after they have identified or made contact with a potential acquisition opportunity. Other times, we select appropriate opportunities from our deal flow to share with our clients.
2. Evaluate the deal’s strategic and financial rationale
We produce a strategic analysis to evaluate the strategic and financial merits of the opportunity including questions such as:
Would the acquisition help our client gain market share, new brands or products, or new customers?
How does this target compare to other similar companies in the industry in terms of business, financial performance and valuation?
What would be the expected financial impact on earnings, return on equity and investor relations of the acquisition on our client?
Are there alternative acquisition targets which may be more attractive?
3. Valuation analysis, capital structure and financing strategies
We produce a comprehensive valuation analysis to evaluate the appropriate price for the acquisition and provide advice on the optimal capital structure and financing strategies for the acquisition.
4. Acquisition financing
We can define a financing package for the acquisition which may include equity, mezzanine and debt capital, and assist in securing the requisite financing from our wide network of institutional investors and banks.
We lead or assist in all aspects of the negotiations between our client and the owners or vendors of the acquisition target.
6. Company Management
In addition to maximizing shareholder values, we ensure that Management’s interests are aligned for a successful transaction.
OTHER STRATEGIC ADVISORY ASSIGNMENTS
Aside from strategic stake sales, mergers and acquisitions, many companies seek to form strategic partnerships or joint ventures or implement corporate restructurings to enhance shareholder value.
For example, a company may seek a strategic investor to invest for a 20% to 30% shareholding and contribute business synergies to bring access to new markets.
Or, a client may wish to form or dissolve a joint venture with another principal or company.
Or, a company may wish to restructure its capital structure and conduct a refinancing or recapitalization exercise in order to reduce its cost of capital or to improve risk management.
In these situations, we can advise on the strategic rationale or value proposition for the transaction, and produce a valuation analysis or report. We can assist in defining and negotiating the transaction structure (for example, a shareholders’ agreement). Of course, we can leverage on our international network to assist our client in locating the optimal strategic partner or investor.