The financial needs of a Company (or a project) keep changing, depending on the overall business cycle or the stage on which the company is operating. A Company should be prepared to adjust in order to meet its financial requirements either for its everyday operation, or for its critical investment expenditure but in some cases, for its very viability as well. The optimum combination of self -financing such requirements or alternatively turning to external sources of financing or even rearranging the whole structure of the Company’s operation in order to attain a better capital structure and easier access to liquidity should be the outcome of careful and specialized analysis taking into consideration the Company’s financial profile and capabilities.
The financial needs of a Company (or a project) keep changing, depending on the overall business cycle or the stage on which the company is operating. A Company should be prepared to adjust in order to meet its financial requirements either for its everyday operation, or for its critical investment expenditure but in some cases, for its very viability as well. The optimum combination of self financing such requirements or alternatively turning to external sources of financing or even rearranging the whole structure of the Company’s operation in order to attain a better capital structure and easier access to liquidity should be the outcome of careful and specialized analysis taking into consideration the Company’s financial profile and capabilities.
Changing the overall structure of a Company or Group of companies is often used as a remedy to a set of identified problems. Such problems are often realized as the outcome of internal organizational deficiencies, intense competition, deteriorating performance or even the result of exogenous factors. Ideally, restructuring is an optimization exercise that is intended to attribute value to the organization as opposed to solve problems ex-post. It requires detailed analysis of the operational characteristics of the Company or the Group, careful evaluation of cost and revenue factors and in-depth analysis of the cash flow outcome and profitability of the new structure. The existing business plan has to be updated and in some cases the extent of a restructuring may involve specific corporate actions (disposals –spinoffs) and possibly a permission from the company’s lenders. Irrespective of the depth and width of a restructuring project, its preparation and detailed execution can only be made possible with the assistance of experts specialized in many disciplines.
M & As are traditionally considered as corporate actions pursuing the growth of an organization and as tools for expansionary corporate policy. In fact, M & As may be as well the outcome of a defensive strategy by one or more of the counterparties aiming at preserving viability, exploiting synergies, realizing economies of scale and attaining higher market share. In most cases the execution of M&As alters radically the existing financial and operational outlook of the involved counterparties. Irrespective of the types of settlement of such an action or the form of group structure that will evolve following its conclusion, it is certain that the outcome is going to be a major reshuffling of assets, operations and shareholders’ value.
M & As require the conduct of serious preparatory work. (Legal & Financial due diligence, valuations, business modeling, tax advisory etc.) In addition, expert legal counseling is required before executing the typical “shareholders’ agreements” that are often necessary for the conclusion of such deals
- Do you wish to sell your Company or are you considering a firm proposal for selling it?
- Do you wish to invest into a Company but you are not certain of the time and the ways to exit?
For all these cases you need expert advice in order to have your interests protected and your returns maximized. The value of a Company is –at the end – the value of the transaction. In its turn, such transaction should be the outcome of a negotiation which requires preparation, assessment of advantages and of all possible disadvantages, meaningful comparisons of similar cases, and much more, experience. Make sure you have your team of experts by your side.
An exit strategy as a part of a participation that you are willing to make should be a cornerstone of your investment decision. Securing exit subject to specific assumptions on time horizon and investment performance should be decided before entering the transaction and should be the outcome of realistic projections and on commitments among shareholders that are always depicted in a suitable agreement.
When investing or recapitalizing, an accurate and prompt due diligence exercise is critical for investors or business partners in order to make profound evaluation of all advantages, disadvantages and risks of a transaction. Our due diligence team will work closely with your internal team and other advisers to deliver a fully integrated support service, assessing multiple aspects and delivering reports tailored to your requirements. Due Diligence may be broken down to financial due diligence and legal due diligence.
Financial due diligence includes among others :
Earnings sustainability assessment , review of historical sales and operating expense trends, historical working capital needs, key assumptions used in management’s forecasts, key personnel and accounting information systems, tax records and receivables analysis.
Legal due diligence is the legal investigation of the company’s current status and its status following the contemplation of the corporate action from a legal viewpoint. It involves thorough examination of documents, contracts and other forms of commitments of the company and it is often extended to include review of business practices and possible outstanding legal threats for the company and its assets.
Valuation is a prerequisite for any corporate action and a critical component of any negotiation either you act as a buyer or a seller or just as an investor.
Valuing a Company is assigned to specialized analysts. It involves an in-depth analysis of the Company’s assets, its operational particulars and the cash flows that is capable of producing. It processes current and future – anticipated performance to derive a value magnitude as the outcome of combination of many internationally accepted valuation methodologies. In the course of this exercise many parameters are assessed, such as the specific sector’s particularities, the inherent risk factors, the interest rate levels as well as comparative valuation data from local and foreign companies of similar type and size. A robust, well justified valuation is the cornerstone of a successful transaction but it requires expertise in financial analysis and performance forecasting and the adaptation of suitable methodology by the experts.
Are you confident that your Company operates on the basis of a specific business plan? Are you aware at any time of your operational margins, the interrelationships among the items in your balance sheet and the effect of any of your current decisions in the future performance of your company? Are you confident that you really act with the help of an operational chart on which your targets are depicted? And above all, are you in a position to analyze such targets to your colleagues and employees and assign them their role and personal target?
Business modeling refers to the preparation of your Company’s business plan which is a critical tool for you in monitoring your operation in the short-medium term. In assisting you with your Company’s business modeling we will use all reasonable assumptions for your Company’s performance, its cash flow generating potential and the financial consequences of the investments that you have underway. We will highlight the main targets of such plan and will stress the presence of possible problems that may be a threat to your Company’s viability.
Your Company’s indebtedness may be a serious threat to its viability. It also affects its liquidity by limiting its access to the Banking system for its working capital needs. Such indebtedness may be the result of the general deterioration of the economy, of adverse sectoral developments, of mistakes in the past, or a combination of all these and many more.
Banks are typically willing to discuss a possible restructuring of your outstanding loans and credit lines. Prerequisite for a such a discussion is the submission of a detailed, reasonable and well documented business plan of your company, depicting an in-depth analysis of your operations and its cash flow generating ability. Understanding the constraints (legal or supervisory) that the Banks themselves face in such workouts is also critical for reaching a common ground of understanding. For all of the above you should rely to specialized people who will make most of the preparatory work. Be aware that just postponing payments for your loans is not a viable solution. It entails additional cost and is going to be short lived. A well designed debt restructuring on the other hand might prove a new start and that is exactly what your Banks wish for your Company
All types of corporate actions such as mergers, acquisitions, disposals of assets, investment planning etc, have discrete tax implications and accordingly, variable financial consequences that is important to identify in advance in order to assess properly the relative costs and benefits, including the end effect at the shareholder level.
Tax advisory services are of high specialization and are provided by our associates who are very experienced in the ever changing tax regime of our country and the commercial law. Their involvement is critical, if we are to succeed in providing a one stop shop of corporate advisory services, that is taking care of all aspects of a transaction and all the needs of our clients.