Mergers and Acquisitions: A Practical Guide for Private Companies and Their Advisers PDF
Preview Mergers and Acquisitions: A Practical Guide for Private Companies and Their Advisers
MERGERS & ACQUISITIONS (cid:2) II _____________________________________________________________ [This page is intentionally left blank] ____________________________________________________________ III (cid:2) [This page is intentionally left blank] (cid:2) IV ____________________________________________________________ [This page is intentionally left blank] MERGERS & ACQUISITIONS A Practical Guide for Private Companies and their UK and Overseas Advisers Consultant Editor: Jonathan Reuvid London and Philadelphia Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors. First published in Great Britain and the United States in 2007 by Kogan Page Limited Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of repro- graphic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 525 South 4th Street, #241 London N1 9JN Philadelphia PA 19147 United Kingdom USA www.kogan-page.co.uk © Jonathan Reuvid, the individual contributors and Kogan Page Limited, 2007 The right of Jonathan Reuvid and the individual contributors to be identified as the authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. ISBN-10 0 7494 4750 2 ISBN-13 978 0 7494 4750 8 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Reuvid, Jonathan. Mergers & acquisitions : a practical guide for private companies and their UK and overseas advisers / Jonathan Reuvid. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-7494-4750-2 ISBN-10: 0-7494-4750-8 1. Consolidation and merger of corporations--Finance. 2. Consolidation and merger of corporations--Management. 3. Private companies--Finance. I. Title. II. Title: Mergers and acquisitions. HG4028.M4R48 2007 658.1(cid:2)62--dc22 2006038103 Typeset by Saxon Graphics Ltd, Derby Printed and bound in Great Britain by Cambridge University Press Contents Notes on contributors x Introduction by Jonathan Reuvid 1 Part One: M & A as a business strategy 3 1.1 Growth curve, plateau or peak? An entrepreneur’s guide to growth 5 Stephen Harris, Mazars 1.2 Alternatives to flotation: accessing capital and exit strategies 13 Kevin McCarthy, Mishcon de Reya 1.3 Selling a private company 21 Dave Rebbettes, BCMS Corporate 1.4 Acquisition target strategies 31 Mike Sweeting, Acquisitions International 1.5 The challenges of management buy-outs 39 David Stanning, B P Collins 1.6 The meteoric rise of the MBO 45 Oliver Hoffman, Mazars 1.7 Grooming a business for sale 51 Peter Gray, Cavendish Corporate Finance Part Two: Funding considerations 59 2.1 Overview 61 Peter Wood and Catherine Hemsworth, Pinsent Masons (cid:2) VIII CONTENTS ___________________________________________________ 2.2 Private equity and VC investment perspectives 67 Paul Rivers-Latham, Cobalt Corporate Finance 2.3 Consideration 75 Edward Hoare and Nick Jennings, Faegre & Benson LLP 2.4 Crystallizing value 80 Adrian Alexander, Mazars LLP 2.5 Pensions issues 91 Richard Jones, Punter Southall & Co Part Three: The mechanics of M&A 97 3.1 Overview 99 Simon Arthur, Horsey Lightly Fynn 3.2 Identifying partners and targets 105 Lisa Wright, Bureau van Dijk Electronic Publishing 3.3 Appointing advisers 115 Daniel O’Connell, Kerman & Co 3.4 Approaching partners and targets 119 Dr Mike Sweeting, Acquisitions International 3.5 Negotiating techniques for the seller 127 Dave Rebbettes, BCMS Corporate 3.6 Taxation and accountancy considerations 135 James A Turner, PKF (UK) LLP 3.7 Legal considerations in making an acquisition for smaller companies 143 Stephen Conybeare, Conybeare Solicitors 3.8 Common features in the acquisition of private companies 153 Alan Kelly, MacRoberts Part Four: The process of M&A 161 4.1 Introduction 163 Peter Wood and David Stevenson, Pinsent Masons 4.2 Critical issues in M&A transactions for SMEs 169 Gideon Nellen, NELLENSolicitors _____________________________________________________CONTENTS IX (cid:2) 4.3 Legal documentation: where to start 177 David Wilkinson, Field Fisher Waterhouse 4.4 Legal documentation: purchase of a company (share sale) 183 David Wilkinson, Field Fisher Waterhouse 4.5 Legal documentation: purchase of a business (business sale) 193 David Wilkinson, Field Fisher Waterhouse 4.6 Due diligence 201 Peter Guinn, Alliotts 4.7 Acquisitions of smaller, owner-managed businesses 207 Philip Wild, Kidd Rapinet 4.8 Cautionary tales 215 Duncan Taylor, Nelsons Part Five: Shareholders’and directors’considerations 223 5.1 The acquisition process, from start to finish – and beyond 225 Geoff Howles, Howles & Company 5.2 Financial public relations in M&A environments 231 Peter Reilly, Aquila Financial 5.3 Post-M&A change management: taking charge of change 235 Norrie Johnston, Executives Online 5.4 Taxation issues 241 Hurst & Company 5.5 Insurance issues in M&As 249 Alan Pratten, Heath Lambert Group 5.6 Service agreements and pension provisions 258 Richard Jones, Punter Southall & Co 5.7 Preparing for admission to the Alternative Investment Market (AIM) 264 Andrew Millington, Mazars 5.8 How to choose your professional advisers for an AIM flotation 273 David Massey, Athanor Capital Partners Contributors’contact list 281 Index 285 Index of advertisers 288 Notes on contributors Adrian Alexander is a corporate finance partner with Mazars LLP, the interna- tional accountancy and business advisory firm. Based in the Brighton office, he acts for owner-managed businesses, supporting them through major transactions, and is active in all the main corporate finance disciplines: sales, M&A, raising finance and investigation work. Mazars acts for some of the fastest-growing entrepreneurial companies in the UK, offering a complete range of accountancy and business advisory services including audit and assurance, tax advisory and compliance, corporate recovery and insolvency, consulting, forensic and investigations, corporate finance and financial services for private individuals. Simon Arthuris a partner in the corporate and commercial services team at Horsey Lightly Flynn solicitors, Newbury. He specializes in corporate transactional matters with a particular emphasis on mergers and acquisitions, equity raisings, corporate restructurings and non-contentious employment matters. Horsey Lightly Flynn is a partner-led practice which can trace its London origins back to 1891. Through a number of strategic mergers and new partnerships, it now serves a growing list of ‘blue chip’corporations, smaller commercial businesses and private clients, nationally and internationally from offices in London, Newbury and Bournemouth. Steven Conybeare is a corporate solicitor who has specialized in corporate advisory work for small and medium-sized companies for over 12 years. As well as acting on a range of corporate finance transactions, he has also been a non-executive director and company secretary of a number of smaller companies, giving him a great insight into the concerns, the pressures and the requirements faced by directors and investors. Conybeare Solicitors is an independent corporate law firm, specializing in company and commercial law. The firm has a dynamic approach to providing solu- tions based on its technical expertise and business experience.
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