3 questions to smart minds

New developments in the M&A business

For this 3 questions to Martin Aschenbach

Tran­sac­tion Engineer
Photo: Martin Aschenbach
14. Febru­ary 2017

The purchase of a company, the merger of seve­ral compa­nies, a succes­sion plan or an IPO require in-depth know­ledge of the company to be acqui­red, which cannot be based solely on the assess­ment of past finan­cial state­ments. Stra­te­gic tran­sac­tions require incre­asingly in-depth indus­try know­ledge. Invest­ment banks and tradi­tio­nal tran­sac­tion advi­sors are often no longer really able to do this. Chan­ges are underway.

For this 3 ques­ti­ons to Foun­ding part­ner of Tran­sac­tion Engineers

1. What chan­ges can be obser­ved in the current M&A business?

Tran­sac­tion Engi­neers is a joint venture of Aschen­bach Corpo­rate Finance and h&z Unter­neh­mens­be­ra­tung. As the name suggests, we see oursel­ves as tran­sac­tion engi­neers in the best sense of the word. Behind this merger is the convic­tion that the M&A busi­ness, espe­ci­ally in stra­te­gic tran­sac­tions, will require more and more indus­try know­ledge and approa­ches to perfor­mance opti­miza­tion in due dili­gence and inte­gra­tion in the future. Invest­ment banks and tradi­tio­nal tran­sac­tion advi­sors can no longer do this. We also believe in the need to strip the M&A process of ever­y­thing that our clients don’t really need. Don’t compli­cate some­thing simple to justify retai­ners. — In our view, M&A is thus beco­ming much leaner in terms of process, but deeper in terms of indus­try exper­tise and the neces­sary opera­tio­nal know-how.

2. Where is the value crea­tion poten­tial in the ’new’ M&A processes?

It is beco­ming incre­asingly important for the buy side to quickly disco­ver the poten­tial sticking points of a tran­sac­tion during inte­gra­tion, to have a 100-day plan at hand, and to have clarity on the value levers of the invest­ment. These opera­tio­nal and perfor­mance issues are beco­ming more central to buyers than deri­ving purchase price ranges from Excel models. Expe­ri­ence shows that it is not so much the opti­mally nego­tia­ted purchase price as the successful inte­gra­tion that makes a tran­sac­tion successful. 

For sellers of compa­nies, our value crea­tion lies prima­rily in discrete stra­te­gic tran­sac­tions. This is where we can leverage our full poten­tial in the search for the best stra­te­gic buyers. It is always a ques­tion of which buyer is willing to pay the highest stra­te­gic premium. And this in a process that is not visi­ble on the market. Clas­sic auction proces­ses and secon­da­ries of PE houses are not our business.

3. They have deve­lo­ped a special format for small and medium-sized busi­nesses: an M&A boot camp for CEOs. How can you imagine this?

The central idea behind the M&A Boot­camp is that CEOs can often manage small and low-comple­xity corpo­rate tran­sac­tions them­sel­ves, but they are unsure about the M&A process.

For this purpose, we have deve­lo­ped an M&A boot camp for mana­ging direc­tors of medium-sized compa­nies. In the M&A Boot­camp, all rele­vant topics and ques­ti­ons are addres­sed in one day, not only in gene­ral, but also speci­fi­cally rela­ted to the company. From the typi­cal course of the process to the valua­tion of the company, deal­ing with lawy­ers and tax advi­sors, mana­ging a due dili­gence, ulti­m­ately nego­tia­ting and up to the final hando­ver of the company.

The boot­camp is desi­gned as a one-on-one coaching session that focu­ses on the indi­vi­dual issues and ques­ti­ons of a poten­tial corpo­rate tran­sac­tion. It’s a prag­ma­tic look behind the scenes — where making yours­elf expen­da­ble as a consul­tant is proba­bly unusual, but intentional.

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