ASSESSED BY AN INVESTMENT FUND (OR A COMPETITOR) TO BUY YOUR COMPANY
First of all, if there is an investment fund “knocking on your door” to invest in your company or if there is a competitor wanting to buy it, you can celebrate! Whatever is your decision, your Company is valuable for the market.
Both cases require due attention, but have specific and distinct dynamics. While a competitor has a more “strategic” interest in the targeted Company (market expansion, efficiency increase by scale, new technologies, etc.), a Fund, either a Private Equity (PE) or a Venture Capital (VC), fundamentally has a financial interest on that Company.
It is obvious that the Fund is also interested in the Company’s strategic, operational and financial aspects because, without it, what would be the real value of that Company? However, an Investment Fund, when invests in a Company, is looking for a financial return on that investment in the future.
Therefore, the arrival of an Investment Fund into the Company should be perceived as an opportunity for future valuation of the Company. But you must be cautious because there are different types of Investment Funds.
You must ensure that your new partner (yes, the Fund will be your partner!) has the ideal profile (investment model, maturation time, management team, etc.) for your Company, as its arrival will bring a new dynamic to the Company. Starting with Governance, but also through controls, risk management, organizational structures and decision making, among others. In addition, the Fund tends to pay less and demand much more in a transaction.
In this context, IN.business acts as a strategic advisor for its Clients, conducting the entire process, from the transaction structuring to its effective concretization, according to its “full advisory services”:
- support in the development of operational plans and financial projections
- calculation of the Company’s market value (Enterprise & Equity Valuation)
- modeling the strategic, financial, legal and ownership structure of the transaction
- development of the communication material (infomemo) and plans (to targets)
- mapping, searching and access the potential buyers (road show)
- conduct all negotiations until the effective closing of the transaction
- coordinate all required Due Diligences (financial, legal, operational, etc.)
- coordinate preparation of contracts (buying and selling, shareholder agreement, etc.)
- permanent support and guidance during all stages of the process
note: IN.business advises on transactions whose value is, at least, US$ 10 million and involving Companies in any market segment and at any stage in their lifecycles: from Startups to Consolidated Companies.
Complementing its advisory services in M&A transactions, IN.business also provides consulting and restructuring services around those transactions. See our complete portfolio of services for additional information.
Therefore, if you are evaluating the possibility of bringing a Fund, already identified or not, into your Company, please contact us. We will be very glad to present you our methodology and show how IN.business can effectively help you and your partners in subject of such importance. It will be a great pleasure!