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Transaction consultancy for mid-caps Development and implementation of strategies
Transaction consultancy for mid-caps
Development and implementation
of strategies
About CVM • Capital Value Management 3
• Partner 5
• References 8
• Integrated service approach for mid-caps 13
• Integrated service approach for special situations 14
Transaction structure • Strategic options within a sales process 15
• Key success factors within the transaction process 17
• Phases of a company’s sales process 18
• Timetable of a M&A sales process 19
Structure
2
3
• Independent corporate finance and M&A consultancy, based in Dortmund
• The business activities are implementation-oriented and are more comprehensive than a mere concept creation. Based on many years of management experience in the mid-cap-sector and a strong methodological know-how, we have got an easy access to complex problems and develop practical, realisable concepts and implement them together with our clients
• Differentiation with the help of an integrated corporate finance advisory approach
• Focused on M&A transactions of medium-sized enterprises in different sectors like industry, trade and service with a typical turnover between € 10 and € 250 million
• Comprehensive industry expertise in a variety of industries such as
CVM Capital Value Management
− Engineering − Automotive − Building suppliers − Chemistry − Wholesale − Industrial services
− Logistics − Aviation − Metal processing − Retail − Software − Textile
Mergers & Acquisitions
Transaction services
Business strategy
About CVM
4
• Competent consulting and takeover of typical tasks in initiating, negotiating and structuring a corporate acquisition or sale for a successful realisation of the planned strategic objectives
• Special expertise in the configuration of succession arrangements, leveraged buy-outs and management buy-outs. Furthermore, extensive experience in the strong growing market of debt advisory (restructuring of liabilities, special situations)
• Coordination and management of all involved parties in the M&A process (lawyers, management consultants, accountants, etc.) and ensuring a timely and efficient presentation of the results to the decision-makers
• Holistic M&A project management for the early identification of critical success factors and timely
modifications of priorities of the due diligence. Continuous consideration of partly interdependent results of the involved external consultants for elaboration of risks (for example deal breakers) and the weighting of relevant influencing factors of the purchase price. Provision of relevant know-how and expert coverage for all steps of due diligence and company valuation
• Substantiated economic statements about the chances of success of the company in its market environment by linking financial and commercial due diligence and connection of both elements for a transparent identification of critical success factors
• Long standing experience in using approved business valuation methods (DCF, income approach valuation, etc.). In addition to the valuation, implementation of market- and transaction-oriented valuation methods (multiples) and expert opinion (for example fairness opinion)
Mergers & Acquisitions
• Acquisitions und sales • Succession arrangement • Management buy-outs / buy-ins • Financial restructuring • Debt advisory • Financial due diligence • Valuation (e.g., fairness opinion)
CVM Capital Value Management GmbH
About CVM
5
Mr Fabian Durst is partner and managing director of CVM Capital Value Management GmbH since 2012. Before he joined CVM in 2009, Mr Durst has worked as an investment manager for the private equity fond Ventizz Capital for five years and has been an associate of the corporate finance consultancy @VISORY partners. During this time, he accompanied the buy- as well as the sell-side of numerous M&A transactions. Besides studying in Frankfurt/Main Mr Durst worked in the investment banking department of Dresdner Kleinwort and in the venture capital department of Harald Quandt Holding. After his bank training, Mr Durst studied business administration at the Goethe University in Frankfurt/Main. He has a degree in business administration and holds a Master of Laws (M&A) of Westfälische Wilhelms-Universität Münster.
Partner
Mr Claus Keller is partner of CVM Capital Value Management GmbH and has been working for TMC since 1999. Mr Keller was educated in law at the universities of Bayreuth and Bonn. Parallel to his job he studied business economics at the University of Applied Sciences in Bochum. Mr Keller published some expert articles in different journals as author and co-author. The topic of the articles are among others: bank strategies in case of company restructuring, turnaround concepts and minimum requirements of insolvency administrations.
About CVM
6
Mr Christian Lützenrath is partner and managing director of CVM Capital Value Management GmbH. Before CVM and TMC were founded Mr Lützenrath worked as turnaround manager for a leading, German turnaround consultancy. At TMC, he manages numerous national and international clients with profitability, strategic and organisational problems. His main focus is the transfer of recovery concepts into his clients’ business, i.e. the operational and financial restructuring of his clients as a turnaround manager. Furthermore, he restructures companies in insolvency proceedings. Mr Lützenrath frequently published and lectured on corporate restructuring and finance, liquidations and recovery in insolvency proceedings. He lectures at FOM Hochschule für Ökonomie und Management and is (co-)author and editor of several books on topics mentioned above. After his bank training, he was educated in economics and law at the universities of Heidelberg, Bonn and Edinburgh. He holds degrees in economics and law from the universities of Bonn and Edinburgh.
Partner
About CVM
Mr Andreas Knaup is partner of CVM Capital Value Management GmbH and specialized in distressed M&A transactions or situations of change. In recent years, he used his hands-on mentality to focus on crisis management and restructuring of companies. As a CRO and interim-CFO he guided numerous companies with operative and/or strategic difficulties through their turnarounds. In particular, he managed M&A transactions in various industries, such as renewable energies, IT and services, automotive, healthcare as well as companies of food and feed industry. As a member of board and managing director (CEO / CFO) within in multinational groups (IT-services, outsourcing and automotive) he gained many years of experience in international management.
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Mr Jörg Schuppener is partner and managing director of CVM Capital Value Management GmbH. Since 1995, Mr Schuppener has been working as management consultant and was responsible for more than 200 consulting mandates, including approximately 20 M&A mandates. Before working as a management consultant, he has worked for a German bank in the credit, corporate clients and specialist financing departments for nine years. After his bank training, Mr Schuppener studied business administration in Bochum parallel to his job. Mr Schuppener published 19 articles in expert journals and was editor, author and co-author for seven specialised books.
Partner
About CVM
Mr Kai Peppmeier is partner and managing director of CVM Capital Value Management GmbH. He is an active member of several supervisory boards and advisory councils in the automotive and service industry for many years. During the last years, Mr Peppmeier was mandated as interim CFO or CRO (for example in the automotive, building supplies, textiles and aviation industry). Before CVM was founded, he has been the CFO/CRO and managing director of a national acting construction company for three years. Furthermore, he has worked eight years in the corporate finance and institutions department of Deutsche Bank AG. After his military and bank training, Mr Peppmeier studied business administration in Bochum parallel to his job at Deutsche Bank AG.
2016
2016
2017 References I / VI
About CVM
8
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2015
2015
2016 References II / VI
About CVM
9
2013 2014
2014 References III / VI
About CVM
10
2013
2012
References IV / VI
About CVM
11
2011
2010
2012
2011
References V / VI
About CVM
12
2010 References VI / VI
About CVM
13
14
Integrated service approach for mid-caps
Company transactions • Acquisition / sale of
companies and business units (asset deal)
• Succession arrangement
• Economic accompaniment of the negotiations
• Business / asset evaluation
-Network Specialists for mid-caps
Corporate finance • Restructuring of liabilities
• Special financing
• Equity and debt funding
• Acquisition financing
Assistance in tax matters • Tax due diligence
• Optimisation of transactions with regard to individual tax situation
Assistance in legal matters • Legal due diligence
• Draft of sale and purchase agreement
• Legal assistance during negotiations
CVM Network
Depending on the given task a well-attuned team from the CVM network will find the most time and cost efficient way to execute the transaction.
Mergers & Acquisitions Financing Tax consultancy Legal consultation
About CVM
15
Integrated service approach for special situations in cooperation with TMC
Corporate transactions in special and transitional situations • Succession arrangement
• Sales in a corporate crisis
• Acquisition of companies in need of recapitalisation
• Asset sale due to insolvency
• Business and asset valuation
Experts in special situations
Services in existential corporate crisis • Brief analysis
• Concept for recapitalisation
• Turnaround accompaniment
• Recapitalisation by asset transfer
• Recapitalisation out of insolvency
Corporate finance in special and turnaround situations • Restructuring of liabilities
• Special financing
• Equity and debt funding
• Acquisition financing
Depending on the given task a well-attuned CVM-TMC-team will find the most time and cost efficient way to realise the required measures.
Mergers & Acquisitions Turnaround / insolvency Financing
About CVM
16
Strategic options within a sales process
Option Description Advantage Disadvantage • Single Buyer • Access to sensitive data for competitors is very
limited • Less disturbance of management and
employees • Quick closing possible (but not usual)
• Difficult to create a competition situation for the transaction process
• Limited negotiation power of the seller • Revenue maximisation not possible owing
to circumstances • Higher probability of failure
• Successive contact with a limited number of buyers
• Less disturbance of the company • Possible creation of interest in a short time • Limited risk of damaging the competitive position • Limited competition possible • Prioritisation of potential investors because of
sensitivity reasons is possible
• All in all, relatively long duration of the entire sales process
• Complexity of contract design • Higher transaction costs because of the two-
stage process • Higher (management) resource needed
Individual negotiations
Successive contact
• “Staggert process“, i.e. existing interested parties are involved in a limited controlled auction process
• Limited number of potential buyers
• Possibly increased complexity by structuring a two-stage or sequential process
Limited controlled auction process
• Creation of a competition situation • Possibility of “preemptive bids” • Ensuring an adequate level of confidentiality
(two-stage process) • Low risk of ignoring a potential buyer • Two-stage process provides additional safety
in the assessment of the seriousness of offers
• High number of potential buyers
• Risk of breach of confidentiality increases with a growing number of potential, contacted buyers
Open auction
Transaction structuring
17
Strategic options within a sales process
Option Description Disadvantage • Sale of the whole
company to one strategic or financial investor
• Complete retirement of shareholder is possible • Using the current positive market environment
for M&A transactions • Relatively quick closing of the sales process
• After sale, no influence on the corporate strategy is possible
• No maximisation of enterprise value
• At first, sale of a stake to an investor and / or capital increase
time thereafter
• Influence of the existing shareholders on the business is still possible
• Participation in business success • Maximisation of enterprise value • Ensure a smooth ownership transition
• All in all, relatively long duration of the entire sales process
• Complexity of contract design • Higher transaction costs because of the
two-stage process • Higher (management) resource needed
Complete sale in a single step
Two-step sales process
• Later, sale of the remaining shares to the same or another investor (or a total sale to a new investor is possible)
• A suitable moment of sale to current attractive market conditions for M&A transactions could be missed
Advantage
Transaction structuring
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• Implementation of a controlled auction process
• Presentation of the investment opportunity to a selected group of strategic and financial investors
• Early evaluation of the purchase intentions of investors with the help of intensive, continuous dialogues; targeted expansion of the company's understanding and ensuring the necessary resources for the relevant investors (“market sounding")
• An honest dialogue before negotiations, which contains the relevant risks and their significance for the investment case of each individual investor
• Maintaining the flexibility to be able to individually consider the interests of the involved parties (custom-made process instead of a "standard sales process")
Key success factors for a transaction process
Contacting ‘right’ investors and assuring flexibility and a competitive momentum
Credible communication is an essential value driver to potential investors
Achieving or exceeding the financial plans
• Diversified product portfolio (full-service provider)
• Diversification of risks to different customer groups (commercial and public customers)
• Potential of expansion
• Platform for the advancement of consolidation opportunities in the industry • Opportunity of a market entry for foreign, strategic investors to the European market
• Development of a plausible and reliable “bottom-up” business-plan
• Active, positive communication policy (overfulfillment of the business plan, etc.)
• Preparation of the management for communication of any negative developments regarding financial data
Transaction structuring
19
The different phases of a corporate sale
CVM offers a number of counselling services in the course of a limited auction
• Identification and coordination of a short-list
• Compilation of sale documentation; teaser, fact book, management presentation, confidentiality agreement, guidance letter, letter of intent (LOI)
• Business plan development / review
• Preparation of Q&A, management presentation rehearsal
• Concluding contract negotiations • Signing of sales and purchase
agreement • Closing
• Addressing potential international investors • Exchange of confidentiality agreements • Distribution of fact book, guidance letter, letter of intent (LOI) • Analysis of indicate offers; nomination of candidates for the
data room phase • Execution of data room phase, management presentation
and site visit • Distribution of share purchase agreement, guidance letter for
concluding offer • Reception and evaluation of final offer • Selection of two or three potential purchasing parties for
confirmatory due diligence and definition of contract negotiations criteria for selection (such as: purchase price, probability of conclusion, speed of transaction, financing capacity, guarantees required by the buyer, “cultural fit” etc.)
Lim
ited
auct
ion
Phase I: Preparation Phase II: Limited auction Phase III: Contract negotiations
Sum
mar
y
• Incorporation of CVM’s transaction expertise to identify, narrow down and contact potential investors. Consultation of experts from CVM’s industrial network, if required
• Analysis of the financial data at hand and further development of the existing business plan for presentational purposes within the sale documentation
• Preparation of the management presentation and full-service assistance in the due diligence audits of potential purchasers (compilation and administration of the data room, Q&A)
• A professionally conducted sale process usually generates a significant competitive momentum, thereby increasing the potential revenue
Transaction structuring
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Timetable of a M&A sales process (‘limited controlled auction process’)
Transaction structuring
Project week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Phase I: Preparations
1. Company presentation (fact book)- Creation and discussion
2. Preparation of controlled auction process- Guidance letter- Non disclosure agreement (NDA)- Identification of potential investors (long list)- Selection and prioritisation of potential investors- Demand for letter of intent (LOI)- Demand for binding offer- Documentation of the auction process
3. Teaser- Creation teaser
4. Legal barriers (if existent)5. Task group-list
- Creation and disposition of task group-lists6. Business plan
- Modelling business plan- Modification business plan- Development equity story
7. Company valuation- Presentation of the company valuation
8. Due diligence preparation- Data room / -index creation and anticipation of possible investor questions - Management presentation draft- Management presentation on approval
Phase II: Controlled auction process1. Contact of potential investors
- Contact of potential investors depending on defined priorities2. LOI
- Submission of LOI's- Comparison of LOI's- Decision which investor to prioritise
3. Due diligence- Data room and site visit- Management presentation- Prenegotiation of the sale and purchase agreement
4. Binding offer- Submition of binding offers- Comparison of binding offers- Decision which investor to prioritise
5. Final negotiation- Negotiation of the sale and purchase agreement- Signing and closing
3rd Month 4th Month1st Month 2nd Month
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Joseph-von-Fraunhofer-Str. 29 44227 Dortmund Tel.: +49 (0) 2 31 / 84 17 47 – 0 Fax: +49 (0) 2 31 / 84 17 47 – 70 E-mail: [email protected] Internet: www.cvm-gmbh.de * associated office Copyright © 2017, published 04/2017 CVM Capital Value Management GmbH All rights reserved. No part of this hand-out and its strategic ideas may be reproduced, distributed or used in any other form without the written approval of the author.
